Europa Oil & Gas announced that drilling the main section of the Hykeham-1 exploration well, situated on the PEDL150 license near Lincoln, has commenced. The BDF28 rig was mobilized to the site on November 9th and the well is testing the potential for up to 20 million barrels of oil in place in two target horizons. The anticipated final TD of just over 1,000m is expected to be reached by early December.
Hykeham is a low risk prospect situated in the main producing fairway of the East Midlands Petroleum Province. It is one of several leads and prospects identified on the PEDL150 license each with similar risk/reward profiles. Across the East Midlands Petroleum Province, Europa has a significant high quality exploration holding of over 100,000 net acres containing 12 identified leads and prospects with gross unrisked potential for over 350 million barrels of oil in place.
Success at Hykeham will significantly increase Europa's oil production levels and more than double group 2P reserves. The East Midlands remains relatively underexplored, with a low exploration drilling density despite the cumulative production of 75 million barrels of oil to date. This makes it an attractive area to explore for further oil, with crude sold locally at close to Brent prices, developments coming quickly into production and a corporation tax burden of only 60% of that on existing UK production.
Paul Barrett, Managing Director of Europa, said, "We regard the East Midlands as a key core area for Europa due to a combination of technical and commercial positives. Success at Hykeham will create a step change for the Company and be a driver for both further potential reserves growth and stronger profits in 2010."
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