Europa Oil & Gas provides update on Wressle, North Lincolnshire
Thursday, Jan 18, 2018
Europa Oil & Gas (Holdings) plc has provided an update from Egdon Resources (‘Egdon’) regarding the forward plan for the Wressle oil field development on PEDL 180 in the East Midlands, including preparation and submission of two new planning application to North Lincolnshire Council seeking its consent for the Wressle oil field developmentand and to extend the current planning consent

This follows the Planning Inspector’s decision to reject Egdon’s appeals (‘the Appeals’) against the two planning refusals by North Lincolnshire County Council’s Planning Committee, as announced on 5 January 2018.  Europa has a 30% working interest in Wressle alongside Egdon (operator, 25%), Celtique Energie Petroleum Ltd (30%), and Union Jack Oil (15%), (‘the Joint Venture partners’). Egdon`s full RNS is reproduced at the end of this release.

Update on proposed sale of 10% interest in Wressle to Upland Resources (UK Onshore) Limited (‘Upland’)

Following the dismissal of the Appeals by the Planning Inspector, Upland has informed Europa of its intention to withdraw from the Sale and Purchase Agreement (‘SPA’) signed between the two parties on 24 November 2016.  Under the terms of the SPA, Upland was to acquire a 10% interest in PEDLs 180 and 182 from Europa subject to, inter alia, planning permission and approval of the Wressle Field Development Plan (‘FDP’). See announcement of 24 November 2016 for further details.

Upland’s decision has minimal impact on Europa in the short term, as the Company had been and continues to pay its 30% share of the costs at Wressle.  Europa will repay £160.000 paid by Upland as deposit. Europa’s share of any future production will now be 30% compared to 20% had the SPA with Upland been completed.  Based on an anticipated gross flow rate of 500bopd on production startup, Europa’s net share of production will therefore be an estimated 150 bopd rather than 100bopd.  In addition, the SPA was agreed in November 2016 when Brent Crude was trading between US$45-US$50 compared to US$69 per barrel at the time of writing.

The Company maintains a good relationship with Upland, with whom it is a partner on PEDL299 in the East Midlands which contains the Hardstoft oil field.  As a result, management would have no hesitation in cooperating with Upland in future new venture opportunities.  As mentioned at the AGM in December 2017, Europa is actively engaged in the review of new venture opportunities across the E&P spectrum both within its core areas of interest and also in three new jurisdictions.

Europa's CEO, Hugh Mackay, said: “Wressle is a proven oil discovery with proven reserves, significant upside and capable of flowing at 500 bopd gross on production startup. It remains an excellent opportunity to significantly increase our net production.  Along with all the partners, we therefore support Egdon’s plans to submit new applications that address the issues raised by the Inspector.  We are confident these issues are not insurmountable and that Wressle will finally be brought online.   Following Upland’s withdrawal from the SPA, our 30% share would see Europa’s net daily production more than double to around 250 bopd.

“Wressle is just one of many value generating opportunities within our portfolio.  As well as interests in other UK onshore licences including the Holmwood prospect which lies next door to the Horse Hill discovery in the Weald Basin, we have an industry leading position offshore Ireland comprised of seven licences exposed to six different play types in three basins. Combined these licences have the potential to host gross mean un-risked prospective and indicative resources of 4.7 billion barrels oil equivalent and 1.5 tcf gas.  We are focused on realising the potential across all our licences, including Wressle, and I look forward to providing updates on our progress in the year ahead.”

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