Europe Receives Extension for Romanian Exploration License

Europa Oil & Gas reports that the Romanian National Agency for Mineral Resources has approved an extension of up to three years and change of Operatorship for the EPI-3 concession. Europa will operate the concession, situated in the East Carpathians, with a 33.3% working interest, Czech partner MND holding the remainder. A side agreement gives Europa an 80% beneficial interest in the eastern part of the block, containing the Costisa-1Z well, and a 20% interest in the western part of the block.

Both Europa and MND recognize further prospectivity in the Block, which lies immediately north of the Moinesti oilfields and immediately west of the 600bcf Roman gasfield. Testing the Burdigalian gas shows encountered in Costisa-1Z is an initial priority with the re-entry and testing of these gas sands anticipated to take place in summer 2006. Further potential around the Geamana and Tazlaul Mare fields will also be assessed.

Costisa-1Z was suspended for later re-entry in December 2005, following encountering strong gas shows in Burdigalian sands at a depth of approximately 1,000 meters. It was not technically justifiable to test these sands in the original borehole, as they had been exposed to heavy drilling muds for over three months before being logged and cased. Consequently, a short sidetrack away from the damaged zone is planned with a drill stem test.

Whilst the logs were of poor quality due to excessive borehole size in the original hole, they confirmed the gas shows were from the upper 25 meters of a 50 meter sandstone-prone unit with up to 20% porosity. If the initial test is successful, it could be extended to provide detailed reservoir performance data and the gas exported into the nearby pipeline system.

Paul Barrett, Managing Director, said 'I am personally looking forward to this test with great anticipation. There are indications on the seismic data that this play extends northwards from Costisa. If successful, its modest depth and proximity to the gas pipeline system will minimize development costs'.

Europa Oil & Gas (Holdings) plc - AIM: EOG - focuses on the production and exploration of hydrocarbons in Europe and North Africa. It currently produces 210 barrels of oil per day from UK onshore fields and 25 barrels of oil equivalent from the Ukraine. Production is expected to rise significantly after its Romanian Bilca Gas Project comes onstream later this year. Operating a balanced portfolio, Europa currently has field appraisal activity on projects in the UK Southern Gas Basin and onshore Romania and exploration activity on a further eight licenses across the Europe - North Africa region.