Europa Oil gets approval to progress towards drilling at Inishkea

UK and Ireland-focussed oil and gas exploration, development and production company Europa Oil & Gas announced on Wednesday that the Irish Government has approved its application to convert Licensing Option 16/20 in the Slyne basin in Atlantic Ireland to Frontier Exploration Licence 4/19.

The AIM-traded firm said the wholly-owned licence included its flagship Inishkea prospect, which lies immediately to the north west of - and abuts - the producing Corrib gas field in the Corrib Field Petroleum Lease Area.

It said the Inishkea prospect had estimated gross mean unrisked prospective gas resources of 1.5 trillion cubic feet, and had been assigned a one-in-three chance of success.

The next steps for the licence, which had a 15-year term from 1 August, included a site survey in preparation for drilling an exploration well, subject to funding and regulatory consent.

An application to obtain a site survey on the Inishkea prospect was in process, the company’s board confirmed.

“The conversion of LO 16/20 into a 15-year FEL is an important milestone for the company, as it allows our flagship Inishkea gas project to be drilled once funding and relevant regulatory permissions have been secured,” said Europa Oil & Gas chief executive officer Hugh Mackay.

“With a one-in-three chance of holding gross mean unrisked prospective resources of 1.5tcf of gas, close proximity to the producing Corrib field, and the potential availability of spare capacity in the gas infrastructure, Inishkea represents a low risk opportunity to generate high exploration reward.”

Mackay noted that the company had negotiated farm-in agreements in respect of FEL 4/19, FEL 1/17 and FEL 3/13 with the north western Europe division of an unnamed major oil company.

“Europa is in regular contact with the major and continues to await a final investment decision from the Major’s head office.

“However, owing to the length of time it has taken to complete the farm-in agreement, we have continued to market the licences to other potential partners, resulting in a number of other major oil companies expressing an interest in farming in to FEL 4/19.”

Europa was focussed on being in a position to drill Inishkea at the earliest opportunity, Mackay explained, with farmout discussions ongoing with a number of parties, including the unnamed major.

“Together with the upcoming formal award of an offshore exploration permit on the Atlantic Margin of Morocco and positive news regarding the Wressle development, this is an exciting period for Europa and I look forward to providing further updates on our progress.”