15th Apr 2015 08:23
LONDON (Alliance News) - Europa Oil and Gas (Holdings) PLC Wednesday said it made a pretax loss in the first half of its financial year after it booked an impairment against one of its producing fields and revenue was hit by lower production and the fall in world oil prices.
The European focused oil and gas company swung to a GBP1.4 million pretax loss in the six months to January 31, from a GBP476,000 profit a year earlier after it recorded a GBP1.1 million impairment against the West Firsby field in Lincolnshire. Revenue fell to GBP1.3 million from GBP2.1 million.
Europa achieved an average oil price of USD78.3 per barrel in the first half of the financial year, significantly down from an average of USD108.3 per barrel a year earlier, and production fell to 144 barrels of oil equivalent per day from 170 barrels.
All of Europa's production currently comes from six wells across three fields: Crosby Warren, Whisby, and West Firsby. Europa said the fall in production was partially due to losing 8 barrels per day from the WF9 well, which at current prices is uneconomic to work over, it said.
Europa said production is on target to remain at around 144 barrels per day for the full year.
Alongside revenue falling, administrative expenses rose to GBP612,000 from GBP371,000, partially offset by finance costs decreasing to GBP105,000 from GBP120,000 and by finance income increasing.
"With Wressle moving from prospect to discovery and soon onto an extended well test ahead of full production, we are poised to see an increase in production, revenue and cashflow. This should coincide with confirmation of the scale of our Irish prospects and the next steps in their progress towards maturity," said Chairman Colin Bousfield.
Europa's immediate focus is on the Wressle discovery in Lincolnshire, where the company drilled two wells in the period, which achieved combined flow test rates of 710 barrels of oil equivalent per day. Europa will conduct extended well tests on the discovery in the second quarter of 2015 "ahead of long term production", it said.
Europa holds a 33.3% interest in the Wressle discovery on the PEDL180 license with fellow listed Egdon Resources PLC holding 25% and Union Jack Oil PLC holding an 8.3% stake.
In terms of the company's French licenses, Europa are continuing talks about the potential farm-out of its wholly owned Bearn des Gaves field.
"In addition to our existing inventory, we have applied for licences in the 14th UK onshore round and are preparing our applications for the forthcoming Irish offshore licensing round. We also continue to evaluate a number of potential acquisition opportunities," said Bousfield.
"Whilst the current oil price presents challenges for all exploration and production companies, I am confident that Europa has an excellent portfolio of assets and opportunities," said Bousfield.
Europa shares were trading flat on Wednesday morning at 6.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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