21st Oct 2011 07:00
The directors of Europa Oil & Gas (Holdings) plc are pleased to announce thefinancial results of the company for the 12 months to 31st July 2011. The full Annual Report and Accounts are available today on the Company website www.europaoil.com and will be mailed to shareholders early in November.
The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 July 2011 or 2010, but is derived
from those accounts. The auditors have reported on those accounts; their report was unqualified however the auditors drew attention, by way of emphasis to Note1 below regarding the Group's ability to fund its licence commitments.
It is further announced that Paul Barrett has resigned from the board with effect from 21 October 2011.
Operational highlights* Drilled West Firsby-9 and Barchiz-1 wells* Assumed operatorship of Brates concession* Remapped Berenx structure using controlled beam migration processed 3D seismic* Gained interest in PEDL182 containing the Broughton prospect through deal with Egdon & Celtique* Participated in seismic acquisition in 3 Romanian concessions Financial performance* Revenue of £3.8m (2010: £3.1m)* Pre-tax profit from continuing operations £0.3m (2010: loss of £1.7m)* Net cash £1.9m (2010: debt of £0.5m) Post reporting date events* HGD Mackay was appointed as a director on 6 September 2011, and asCEO on 10 October 2011* Horodnic-1 well spudded on 11 October 2011* Award of two licensing options over acreage in the 2011 Irish Atlantic Margin Round 17 October 2011* PA Barrett resigned as a director effective 21 October 2011
Chairman's statement
Dear Shareholders,The Company has been active in all of its core areas during the year. Activitiesconcentrated around development drilling in the UK, exploration drilling in Romania and planning seismic work in France designed to drive a high impact future drilling campaign. Compared with the prior period, financial performance improved in terms of revenue, profitability and cash. The appointment of finnCap as broker and nomad at the start of the year assisted the Directors in raising a total of £5.9m of equity. The last of these fundraisings took place in June 2011, during a period of difficult market conditions. The availability of less cash than anticipated led to a decision to put the SEDA and SEDA backedloan in place to give the directors more flexibility going forward.In the UK the drilling of WF9 was completed in February 2011 and we have spent considerable time and effort in determining the optimum production scheme for the well. Despite an excellent result in terms of well placement, reservoir quality and thickness, to date the well has underperformed in terms of production and has now settled at a level of 30 bopd. Remedial well work also took place at the same time, rehabilitating WF7 and completing WF3 as a water injector, providing the necessary water disposal capability for future production operations.At Crosby Warren we had included a repeat frac of CW1 in our work plans. However, a significant increase in the projected cost of the work as well as adverse tax changes have led the board to ask for a review of the commerciality of the project and a decision will be taken following that review on whether to proceed.The local authority planning committee decision to refuse permission to drill an exploration well at Holmwood was in contrast to the planning officers' support for the project. We have decided, along with our partners, to appeal the decision and are confident that our arguments will be looked at favourably by the appointed inspector.The exploration well on the Barchiz oil prospect in Romania was spudded in October 2010. For technical reasons it failed to reach its original target although encouragingly, oil was present in a shallow reservoir. The operator MND has since elected to withdraw from the licence. We currently have a 100% working interest and are discussing with prospective partners the programme of deepening the well to reach the original target.In the Romanian concession at Brodina, the Voitinel discovery is being appraised by the drilling of a well, Horodnic-1, which spudded on 11 October 2011. This is an important well and a good test will confirm the commercial viability of the discovery.During the period, we participated in the 2011 Irish Atlantic Margin Licensing Round and on 17 October 2011 were awarded two Licensing Options covering approximately 2,000km2 of the Porcupine Basin. Previous drilling in the basin led to the discovery of Connemara, Spanish Point and Burren oil and gas fields, thus proving a viable petroleum system. The focus is now on the potential for large stratigraphic traps similar to those that have been highly successful elsewhere along the Atlantic Margins. Consequently, we are excited by this award and are looking forward to developing drillable prospects in these areas.In September 2011 we were advised that Romanian VAT had been assessed on a previous transaction. The cash involved is £0.6 million consisting of principal and interest. The judgement was contradictory to the strong expert opinion that we had received from KPMG and we will be reviewing the further options open to us.In France we are in the process of securing licence extensions with the regulatory authority in order to execute our ambitious plan to explore in two areas over the next 18 months. The directors are considering funding options for the various exploration activities in France and Romania.
More detail about the exploration activities of the company can be found in the Operational review.
In April 2011 Paul Barrett notified the Company of his resignation. He is a co-founder of Europa and has been instrumental in assembling the assets that we have today. On behalf of the board I would like to thank him for his efforts and to wish him well in his future ventures.On 10 October 2011, Hugh Mackay was appointed as Chief Executive Officer. He comes to Europa with an impressive background in oil and minerals and I believe he will provide the impetus to create value through the development of our existing assets and making additions to the Europa portfolio.It is worth mentioning here the recent changes to the oil and gas landscape, notably in the US, but now also in Europe. Europa's portfolio has been built up over many years on the basis of conventional oil and gas potential, though it is clear that areas prone to conventional hydrocarbons generally have potential for unconventionals too. Recent activity in the UK, where Cuadrilla have assessed the potential for up to 200 tcf of gas in their Namurian shale acreage in Northern England, has highlighted the huge potential for this resource. Europa's Humber Basin acreage, situated in a similar Namurian rift basin to Cuadrilla's acreage, is a prime example of where unconventional potential could be a significant adjunct to conventional hydrocarbons. Consequently, Europa will be monitoring the progress of shale gas developments very closely.Europa's solid portfolio has much to offer - continued production, undeveloped discoveries, quality exploration prospects and the prospect of unconventional hydrocarbons.Operational review
Europa's business comprises three core strands: production, appraisal and exploration and these activities take place in three European jurisdictions: UK, France and Romania and one in the North African territory of Western Sahara. In October 2011, Europa was additionally awarded acreage in a fourth EU jurisdiction in the Irish Atlantic Margin Licensing Round.The Company continues to evaluate new venture opportunities in the European and North African region to strengthen its asset base. The current licence portfolio is summarised in the table:Country Area Licence Field/prospect Operator Equity Status UK East DL003 West Firsby Europa 100% Prodn Midlands DL001 Crosby Warren Europa 100% Prodn PL199/215 Whisby-4 BPEL 65% Prodn PEDL150 Hykeham/W. Whisby Europa 75% Expln PEDL180 Wressle Egdon 33% Expln PEDL181 Caister Europa 50% Expln PEDL182 Broughton Egdon 33% Expln Weald PEDL143 Holmwood Europa 40% Expln North sea Holderness Offshore UCG Europa 90% Expln Humber south Offshore UCG Europa 90% Expln Ireland Porcupine LO-11-7 Western margin Europa 100% Expln LO-11-8 Eastern margin Europa 100% Expln France Aquitaine B©arn des Gaves Berenx Europa 100% Apprl Tarbes V.d'Adour Osmets/Jacque Europa 100% Apprl Romania Carpathians EIII-1/Brodina Voitinel/Horodnic Aurelian 28.75% Appl EIII-3/Cuejdiu Aurelian 17.50% Expln EIII-4/Bacau Raffles 19% Expln EPI-3/Brates Barchiz deepening Europa 100% Expln Western Tindouf Bir Lehlou Europa 100% ExplnSahara Aaiun Hagounia Europa 100% Expln
During the financial year to 31 July 2011, Europa drilled an oil production well at West Firsby (WF9) and participated in an exploration well at Barchiz, in Romania. The Company also participated in seismic programmes in Romania to pave the way for drilling in late 2011 and into 2012.The WF9 well was completed in February 2011 and put on production. It has since contributed to an average daily production increase on the site of 40% from the first to second half of the reporting period. Production operations continue at Europa's two other UK sites, combining to generate an average daily production volume over the year of 167bopd, and a fourth quarter average of 216bopd.With respect to Europa's strong appraisal project portfolio, work continued on better understanding the Berenx gas resource, with a 3D seismic survey, processed by CGG Veritas, greatly adding to the structural understanding of the reservoir. Further 3D seismic data will be acquired ahead of finalizing the location of an appraisal well due for 2013.The exploration arm of the portfolio continues to be active, with the drilling of the Barchiz exploration well in late 2010. The well did not reach the main target, due in part to a decision to test oil shows in shallower zones. A programme to deepen the well an anticipated 600-1,000m to test the main objective is planned.The Company's strong presence in Romania is underlined by the ongoing exploration seismic programmes, coupled with the recent spudding of the second well on the Voitinel gas discovery - Horodnic-1. This well is designed to prove a minimum commercial volume for the development and, if successful, will be followed
by a further well in 2012.United KingdomThe core of Europa's portfolio in the UK is in the East Midlands, a basin with a long history of successful oil exploration and production with potential for additional reserves and vast unconventional resources.Activity in 2011 focused on drilling a further production well on the West Firsby Field and this was completed as a reservoir zone 1 and zone 2 oil producer in February. A facilities upgrade at the site is now complete and work continues to optimise production. Production continued at Crosby Warren and Whisby fields, contributing to a total annual production of 61,000 bbls across the three sites.In May 2011, Surrey County Council Planning Committee narrowly voted against the approval of permission to drill an exploration well on licence PEDL143. This well, to test the Holmwood Prospect, was supported in the planning officers' report and the Company intends to pursue an appeal in the coming months in order to drill the well in 2012.
Following a cross-assignment of interests between Europa-operated PEDL180 and Egdon-operated PEDL182, Europa is now a 33% interest holder in a swathe of acreage running southeast from the Crosby Warren Oilfield, containing the Broughton oil discovery and the adjacent Wressle Prospect. In order to plan
2012 drilling on these projects, a 3D seismic survey is being acquired in late 2011.
Europa holds two inshore licences for underground coal gasification, a large resource at the early research phase in the UK. In addition, Europa has been monitoring the developments in Lancashire with Cuadrilla's shale gas project,which have implications for the large licence area held in northeast Lincolnshire. Similar geology in Europa's Humber Basin acreage to that of the Bowland Trough points to future potential for unconventional if the Cuadrilla Project goes
forward.
Exploration - NE Lincolnshire (PEDL 180 - 33%; PEDL 181 - 50%; PEDL 182 - 33%), Lincoln area (PEDL 150 - 75%), Dorking area (PEDL 143 - 40%)
In June 2011, Europa reached agreement with Egdon Resources Limited and Celtique Energie Petroleum Limited to equalise interests across the contiguous licences PEDL 180 and PEDL 182. Europa reduced working interest in PEDL 180 from 50% to 33% and in return gained a 33% interest in PEDL 182 - the licence containing the Broughton oil discovery. A joint 3D seismic survey over 45 km2 of the combined blocks is being acquired in November 2011.Within the PEDL150 concession, the Hykeham well was drilled in 2010. Despiteencountering oil pay, the well failed to flow oil, thought to be principally asa result of formation damage incurred during drilling. Though the likelyforward plan is to plug and abandon the well, the investment has not beenwritten off as prospectivity within the rest of the block, which includes theWest Whisby feature, is believed to be good based on other information in theGroup's possession. Lessons learnt at Hykeham will be applied in the drillingof other prospects in the same reservoir interval.The PEDL 222 licence (50%), situated to the north of the Whisby Field, did notcontain any prospects large enough to warrant drilling. The modest investmentwas written off in 2010 and in June 2011 the licence was formally relinquished.
Production - West Firsby and Crosby Warren (100%), Whisby-4 (65%)
All three production sites were affected by the severe UK weather in late December 2010. With temperatures reaching 17 degrees below freezing, and several feet of snow, production was shut down for between one and two weeks.
At West Firsby the WF9 well spudded on 18 November 2010 and reached TD of 7,633ft on 17 February 2011. The well was put on production on 1 March 2011 andtrials were conducted on two producing zones using both beam pump and jet pumpsystems. After initial higher rates, production has settled at around 30 bopd.
Additional well intervention work took place at West Firsby, with the completion of WF3 as a water injector and the replacement of the WF7 bottom hole assembly.
Crosby Warren continues to produce from two wells. A re-frac of the existingCW1 producer is currently under review as the original cost assumptions havechanged.At Whisby, just to the west of Lincoln, a well drilled by Europa in early 2003remains on steady production, currently producing around 50 bopd net to Europaon beam pump.
Unconventional Resources - Underground Coal Gasification and Shale Gas
Europa has a 90% interest in two licences awarded by the UK Coal Authority toinvestigate underground coal gasification of virgin coals along the easterncoast of England. These licences are situated in areas with deep coal measureswith little structural complexity and a proximity to existing gas and utilityinfrastructure.Underground coal gasification (UCG) is a developing technology that recovers upto 80% of the calorific value of in situ coal by a process of controlledcombustion. UCG, when combined with CO2 storage in the depleted coal seams,creates a source of energy which rivals nuclear for low emissions and has lowerunit costs than conventional gas-fired power stations.
With only 30% utilisation rate for the coals, the estimated potential UCG energy resource in these two licence areas is 36x10^15 Joules or 6 billion barrels of oil equivalent.
In addition, the Company's large holding of over 600km2 of the Humber Basin,has potential for significant shale gas resources from Carboniferous basinalshales. Whilst this is being evaluated, activities in shale gas explorationelsewhere in the UK Carboniferous basins are being monitored with interest.
France
Europa holds two exclusive licences in the Aquitaine Basin, adjacent to theworld-class Lacq-Meillon gas fields. There are two clear plays inEuropa's acreage - large deep HPHT gas similar to the Lacq field in the B©arndes Gaves permit and oilfield re-development opportunities in the Tarbes Vald'Adour permit. The large gas play, Berenx, is the focus of attention, recentlyreprocessed 3D seismic gives a much clearer image of the target zone andadditional 3D will now be acquired over the western part of the feature priorto finalizing a well location.
Appraisal - The Berenx Structure (B©arn des Gaves Permit - 100%)
The main focus for Europa is the appraisal of the Berenx gas wells, where ahigh pressure high temperature well encountered 500m of gross gas shows and mudgas kicks in similar reservoir to the nearby 5 tcf Lacq Field. In mid-2010,Europa took delivery of a reprocessed 3D seismic dataset covering the areabetween Berenx and Lacq. The proximity (20km) to the Lacq Field creates astraightforward export route, allowing the gas to be processed in an existingfacility with spare capacity.The initial mapping indicates that the Berenx wells were drilled on the westernedge of a sizeable structure which could reservoir in excess of 1.5 tcf ofrecoverable gas reserve. However, the quality of the seismic data was still notoptimal and it was decided to utilise the new technique of Controlled BeamMigration to improve the subsurface image. This was highly successful and pavesthe way for further acquisition across the area. The forward programme is forthe acquisition of additional seismic data in the next 6-12 months followed bysecuring joint venture partner(s) for the drilling of an appraisal well in2013.
Field re-development and associated exploration - Tarbes Val d'Adour Licence (100%)
This licence contains several oil accumulations, previously produced by Elf butabandoned in 1985 in times of low oil price. Europa commissioned the FrenchGeological Survey to map the potential field re-development area of Osmets andJacque from a reprocessed 2D data set and this work is now complete. Itdemonstrates that there is significant upside potential in a stratigraphicallytrapped Meillon dolomite oil (proven in Osmets-1) below the proven EarlyCretaceous oil in Osmets-2.
It is hoped that, with a partner, an appraisal/production well can be drilled on Osmets in 2012.
RomaniaEuropa holds interests in 4 Romanian exploration licences, with non-operatedworking interests varying from 17.5% to 28.75%. Europa has participated in 11wells over the last 7 years in Romania. Of those, 4 were gas wells, a further 2sub-commercial gas wells and the remainder unsuccessful, a technical successrate of just over 50%.Exploration in the licences has moved into a new and exciting phase, where theprimary target is the oil-prone thrust belt in the western part of the area.The Barchiz well did not reach the seismic horizon representing the target andwill be deepened. In addition, appraisal drilling of the Voitinel discovery isnow taking place. This well, Horodnic-1, is designed to prove up a minimumvolume for initial development, but there is significant upside potential inthe play which a third well is anticipated to test in 2012.
In 2011, 2D seismic data were acquired in three of the four concessions, concentrating on understanding the thrustbelt oil play. These data will serve to drive the 2012 drilling programme.
Appraisal - The Voitinel Discovery (EPI-1 Brodina Licence - 28.75%)
The 2009 Voitinel-1 exploration well encountered gas in two sandstone intervalsat around 1,400m and 1,650m depth. The deeper of these tested dry gas at flowrates of 3 mmscfpd, but appeared to be close to a reservoir boundary, limitingthe ability to maintain flow for long periods. A fracture stimulation wasundertaken which increased the volume of gas accessed by the well. Theoperator, Aurelian, has assessed that approximately 6bcf will be produciblefrom each conventional vertical well in this reservoir.
Appraisal - The Voitinel Discovery (EPI-1 Brodina Licence - 28.75%) (continued)
The Voitinel well was drilled close to the northern edge of the structural trend. However, the play extends far to the south of the well, having been proven by recent wells drilled by Romgaz at Paltinu. One well sustained gas flow rates of 5 mmscfpd for one week, indicating that the reservoir in the southern part of the play could be better quality than in the discovery well. A first appraisal well Horodnic-1 is currently drilling.
Exploration - the Carpathian Thrust Belt Oil Play
The exploration strategy in the Romanian portfolio is moving away from the small but nonetheless successful shallow gas play in the eastern part of the licences to explore in the thrust belt oil play that is developed in the western part of all four of Europa's Romanian licences. The US Geological Survey estimates mean undiscovered potential reserves of over 2.9 billion barrels equivalent in the play.
Barchiz is situated in the Brates Licence, immediately north of and along trendfrom the Geamana oilfield (50 mmbo reserves). The Barchiz-1 well was drilled inlate 2010, but due to a poor cement bond it was not possible to deepen the wellbeyond 1,450m and at the same time test the shallow Oligocene oil-bearingsequence. Following logging the well, it was clear the well had not reached itsprimary target, which still lay beneath the 1,450m total depth of the well. Itwas decided to test the shallow oil sands encountered in the well. These testsrecovered modest amounts of 20API oil which was close to its pour point in theshallow reservoir, preventing it from flowing freely. However, it proved thehydrocarbon system and gives encouragement that there will be hydrocarbonsreservoired in the main target. Consequently, it was decided to deepen thewell.The withdrawal of MND from the licence provides an opportunity to bring in anew partner, which is being progressed. The licence term has been extended toMay 2013 and a further highly prospective area in the same licence, underneaththe existing Tazlaul Mare gas condensate field, is anticipated to be maturedfor drilling in 2012.Ireland
LO-11-7 and LO-11-8 (100%) Porcupine Basin
In October 2011, Europa was awarded Licensing Options over two four-block areas in the Irish Porcupine Basin. These blocks lie on the margins of the basin, where there is potential for stratigraphic traps in Cretaceous and Early Tertiary submarine fan systems, similar to similar highly successful plays elsewhere on the Atlantic Margin.
The Porcupine Basin has a proven hydrocarbon system, with several discoveriesto date in predominantly structural traps. Greater potential exists forstratigraphic traps and Europa's work programme will be designed to define thisupside prior to a decision to enter into the drilling phase with a FrontierExploration Licence after 2 years.
North Africa
Western Sahara (100%) - Tindouf Basin and Aaiun Basin Licences
Europa holds interests in Western Sahara licenced by the Sahrawi ArabDemocratic Republic (SADR) covering almost 80,000km2 of exciting explorationacreage. The Tindouf licence has great potential for both conventional andunconventional gas resources, being geologically similar to the prolificAlgerian Palaeozoic basins. The Aaiun Basin is an Atlantic margin basin similarto that developed along the West African margin.In 2010, with the license areas remaining in force majeure throughout the year,the Board decided to write-down the intangible asset to nil value. Though theinvestment has been written down, Europa retains its 100% interest in the 2blocks.
Conclusion
Across the five jurisdictions where Europa operates, there remains a strong asset inventory waiting to be unlocked: Oil exploration in the UK and Romania as well as potential for large gas developments in the Aquitaine area of France and the Romanian Carpathians. Ongoing and near-term drilling will crystallize some of this value, but there remains a conveyor belt of exploration work for the coming years, as demonstrated by the recent Irish awards.
Paul Barrett, Managing Director
Consolidated statement of comprehensive income
2011 2010 £000 £000 Revenue 3,766 3,091 Other cost of sales (2,216) (1,836) Exploration write-off - (1,008)Impairment of producing fields (425) (1,012)Total cost of sales (2,641) (3,856) -------- --------Gross profit/(loss) 1,125 (765) Administrative expenses (646) (709) Finance income 1 37 Finance expense (189) (262) -------- -------- Profit /(loss) before taxation 291 (1,699) Taxation (523) (263) -------- --------Loss for the year from continuing (232) (1,962)
operations Discontinued operations Loss for the year from (788) - discontinued operations
Loss for the year attributable to (1,020) (1,962) the equity shareholders of the
parent -------- --------Other comprehensive income Exchange gains arising on 8 56
translation of foreign operations -------- --------Total comprehensive loss for the (1,012) (1,906) period attributable to the equity
shareholders of the parent ======== ======== Pence Pence per share per share Loss per share (LPS) attributable to the equity shareholders of the parent Basic and diluted LPS (0.22)p (2.60)p from continuingoperations Basic and diluted LPS (0.74)p - from discontinued operations
Basic and diluted LPS (0.96)p (2.60)p from continuing and discontinued operations
Consolidated statement of financial position
2011 2010 £000 £000Assets Non-current assets Intangible assets 11,348 9,751
Property, plant and equipment 6,742 4,504
Deferred tax asset 930 - -------- --------Total non-current assets 19,020 14,255 -------- -------- Current assets Inventories 43 38 Trade and other receivables 795 587 Current tax asset - 335 Cash and cash equivalents 1,876 4 -------- --------Total current assets 2,714 964 -------- --------Total assets 21,734 15,219 ======== ======== Liabilities Current liabilities Trade and other payables (1,757) (1,797) Current tax liabilities - (2) Derivative (56) (55) Short-term borrowings (996) (900) -------- --------Total current liabilities (2,809) (2,754) -------- -------- Non-current liabilities Long-term borrowings (230) (352) Deferred tax liabilities (4,686) (3,240) Long-term provisions (1,570) (1,395) -------- --------
Total non-current liabilities (6,486) (4,987)
-------- --------Total liabilities (9,295) (7,741) -------- --------Net assets 12,439 7,478 ======== ======== Capital and reserves
attributable to equity holders
of the parent Share capital 1,301 822 Share premium 12,573 7,132 Merger reserve 2,868 2,868 Foreign exchange reserve 416 408 Retained deficit (4,719) (3,752) -------- --------Total equity 12,439 7,478 ======== ========
These financial statements were approved by the Board of directors and authorised for issue on 20 October 2011 and signed on its behalf by:
P Greenhalgh, Finance DirectorCompany registration number 5217946Consolidated statement of changes in equityAttributable to the equity holders of the parent Share Share Merger Foreign Retained Total capital premium reserve exchange deficit equity reserve £000 £000 £000 £000 £000 £000
Balance at 1 August 2009 626 4,692 2,868 352 (1,878) 6,660 Total comprehensive income/(loss) for the year - - - 56 (1,962) (1,906) Share based payment - - - - 88 88 Issue of share capital (net of issue costs) 196 2,440 - - - 2,636 ------- ------- ------- ------- ------- -------Balance at 31 July 2010 822 7,132 2,868 408 (3,752) 7,478 ======= ======= ======= ======= ======= =======Balance at 1 August 2010 822 7,132 2,868 408 (3,752) 7,478 Total comprehensive income/(loss) for the year - - - 8 (1,020) (1,012) Share based payment - - - - 53 53 Issue of share capital (net of issue costs) 479 5,441 - - - 5,920 ------- ------- ------- ------- ------- -------Balance at 31 July 2011 1,301 12,573 2,868 416 (4,719) 12,439 ======= ======= ======= ======= ======= =======
Consolidated statement of cash flows
2011 2010 £000 £000 Cash flows from operating activities Loss after tax (232) (1,962) Adjustments for: Share based payments 53 73 Depreciation 354 498 Exploration write-off - 1,008
Impairment of property, plant & 425 1,012
equipment Finance income (1) (37) Finance expense 189 262 Taxation expense 523 263
(Increase)/decrease in trade and (412) (66)
other receivables (Increase)/decrease in (5) (23) inventories
Increase / (decrease) in trade (239) 592 and other payables -------- --------Cash generated from continuing 655 1,620
operations Loss after taxation from (788) - discontinued operations Adjustments for: Decrease in trade and other 193 - receivables Increase in trade payables 617 -
Non cash increase in intangible (22) -
assets -------- --------Cash used in discontinued - - operations Income taxes paid - (597)
Income taxes repayment received 330 -
-------- --------Net cash from operating 985 1,023 activities ======== ========Cash flows from investing activities
Purchase of property, plant and (3,213) (222)
equipment Purchase of intangible assets (1,809) (3,075) Interest received 1 - -------- --------Net cash used in investing (5,021) (3,297) activities ======== ========Cash flows from financing activities Proceeds from issue of share 5,920 2,653 capital (net of issue costs)
Increase/(decrease) in payables 115 -
related to the issue of share capital Proceeds from short-term 1,065 - borrowings Repayment of borrowings (612) (469) Finance costs (80) (101) -------- --------Net cash from financing 6,408 2,083 activities ======== ========
Net increase/ (decrease) in cash 2,372 (191) and cash equivalents Exchange (loss)/gain on cash and (21) 8
cash equivalents Cash and cash equivalents at (475) (292) beginning of year -------- --------
Cash and cash equivalents at end 1,876 (475)
of year ======== ======== Cash and cash equivalents comprise: Cash 1,876 4 Multi-currency facility - (479) -------- --------
Net cash and cash equivalents 1,876 (475)
======== ========Note 1Intangible assets 2011 2010 £000 £000At 1 August 9,751 7,473Additions 1,597 3,286Exploration write-off - (1,008) ------- ------- At 31 July 11,348 9,751 ======= =======Intangible assets comprise the Group’s pre-production expenditure on licence interests as follows: 2011 2010 £000 £000Romania 8,433 7,191France 523 308UK PEDL143 (Holmwood) 199 186UK PEDL150 (SW Lincoln) 2,020 1,904UK PEDL180 (NE Lincs) 68 63UK PEDL181 105 99 ------- ------- Total 11,348 9,751 ======= ======= 2011 2010 £000 £000Exploration write-offEgypt - 738Western Sahara - 184UK - PEDL222 - 55UK - PEDL180/181 pre licence costs - 31 ------- ------- Total - 1,008 ======= =======
In 2010 as the license areas in Western Sahara remained in force majeure throughout the year, the Board decided to write-down the intangible asset to nil value.
As there were no identified prospects in the PEDL222 concession, the Board also decided to write down the investment to nil value. In 2011 the licence was relinquished.
Within the PEDL150 concession, the Hykeham well was drilled in 2010. Though the likely forward plan is to plug and abandon the well, the investment has not been written off as prospectivity within the rest of the concession area, which is considered as one cost pool, is good.If it is not possible for the directors to secure adequate resources to fund the Group’s ongoing liabilities, including the planned forward work programme, the carrying value of the assets of the Group including intangible exploration assets and the investment of the Company in its subsidiaries will require an impairment review.
For further information contact:
Europa Oil & Gas (Holdings) plc - Hugh Mackay / Phil Greenhalgh 01235 553266 finnCap - Sarah Wharry / Henrick Persson / Joanna Weaving 020 7220 0500
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