26th Oct 2015 09:54
LONDON (Alliance News) - Europa Oil and Gas (Holdings) PLC shares rose on Monday after it said it has three prospects offshore Ireland independently valued at USD7.00 billion.
Europa shares were up 11% to 3.76 pence per share on Monday morning.
The three prospects on the FEL 3/13 licence in the Porcupine basin offshore Ireland has been valued by ERC Equipoise, which have stuck a non-risked net present value of USD7.00 billion on the prospects and a risked net present value of USD1.10 billion.
Europa currently holds a 15% stake in the licence, but is currently awaiting for Irish government approval to take back a 100% interest in the licence after its partner Kosmos Energy Ireland pulled out earlier this year.
Back in May, Europa reported the three prospects on the licence had a total gross un-risked prospective resource of 1.50 billion barrels of oil equivalent.
"With the imminent departure of Kosmos from the licence our net interest will revert to 100%, subject to government approval, with a potential net mean un-risked net present value of approximately USD7.00 billion and a net mean risked net present value of USD1.10 billion estimated by ERCE. We believe this is a very strong indication of the commercial potential in our licences in offshore Ireland," said Chief Executive Hugh Mackay.
Although Europa is likely to gain approval to take back 100% ownership of the FEL 3/13 licence, Europa will need to source a new partner to help fund the required drilling on the licence to turn the extensive prospective resource into a commercial operation.
"To realise this potential we need to drill exploration wells and find oil. Our mission is to land a farm-in partner to share the costs of drilling and the target audience is major and mid-cap oil companies. As a consequence of the drop in oil prices day rates for state of the art harsh-environment deepwater drilling rigs have halved. The next few years offer an opportunity to drill offshore Ireland at the lowest rig costs in over a decade," said MacKay.
"We are encouraged by the high levels of participation in the 2015 Atlantic Margin licensing round, particularly given the low oil price. It would appear that many other companies share our belief in the technical and commercial case for exploration offshore Ireland," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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