The Directors of Europa Oil & Gas (Holdings) plc, the exploration and production company, are pleased to provide a review of the Company's financial and operational highlights for the 2007 calendar year.
In May, the Company undertook a reorganisation of its Romanian portfolio, generating £2.0 million cash and a £2.5 million contribution to future drilling costs.
Also in May, the Royal Bank of Scotland, bankers to the Company, provided a £ 2.0 million credit facility, primarily for use on its UK production projects.
In June, agreement was reached with Gemini Oil & Gas Limited to repay the loan provided for the purchase of the West Firsby Oilfield and cancel Europa's obligation to make payments to Gemini from future field revenues. The loan was fully settled in November.
In July, Europa contracted Energy Resource Consultants Limited to undertake an independent review of the Company's UK oil reserves. Following the review the Company was able to increase its booked Proven plus Probable reserves by 75% to 1.0 million barrels of oil (at 31 July, 2007).
Europa ended 2007 with daily oil production of approximately 250 bbls/day at a realised price of $90/bbl. This provides Europa with a healthy monthly cashflow currently in the region of $700,000/month.
In February, Europa was awarded operatorship and a 50% interest in two blocks in the UK East Irish Sea. These blocks, 109/5 and 112/30, contain the large Ellen Vannin Prospect, an undrilled structure with most-likely Prospective Resources of 1.6 trillion cubic feet (tcf) of gas (270 million barrels of oil equivalent).
In March, Europa was awarded the Béarn des Gaves Permit in the Aquitaine Basin of southwest France. The acreage lies adjacent to the largest onshore gas producing area in France, the Lacq/Meillon Gasfields, which together have produced over 12 tcf (2 billion barrels of oil equivalent).
In April, the Company completed the acquisition of 50km of 2D seismic over its southwest Lincoln acreage (PEDL150). The interpretation of the seismic data has identified a very low-risk prospect demonstrating a common closing contour with the nearby Whisby Oilfield and updip of a well with very strong oil shows.
In June, a Production Sharing Contract on the West Darag Licence was signed with the Egyptian Authorities. The Company subsequently built a highly competent team in Cairo to execute the first phase of exploration. This team is headed by Dr. Darwish Khaled, the former Chief Executive of GUPCO, the Egyptian-BP joint venture company.
In August, the UK East Midlands Crosby Warren-2Y well was drilled and subsequently put into production in November 2007. A fracture stimulation of the well is planned which it is hoped will provide similar results to that achieved in Crosby Warren-1, which produced at 400bopd following a similar stimulation.
In November, the Romanian East Carpathian Boistea-1 well reached total depth. The well encountered a thin gas bearing sand and is awaiting execution of a test program scheduled for January 2008.
In December, the Company was informed by the French Government of the exclusive award of the Tarbes - Val d'Adour Permit, near its existing acreage in the Aquitaine Basin. The permit contains the Jacque and Osmets oil fields, which produced light oil until 1986, when the oil price fell to around $10 per barrel and the fields were shut-in. The initial flow rate from wells on these fields was up to 700 barrels of oil per day and the conclusion of a preliminary review indicates that the fields may contain significant undeveloped reserves.
Paul Barrett, managing director, said "2007 was an active year and sets the Company up for strong growth in 2008. Production enhancement projects will be the initial focus in the UK. With up to 4 wells planned in 2008, the pipeline of significant exploration upside continues to build in all of our countries of operation.'
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