Europa sells PEDL 143 interest to UK Oil & Gas

UK and Ireland-focussed exploration, development and production company Europa Oil & Gas has conditionally agreed to sell its 20% interest in UK onshore licence PEDL 143 to UK Oil & Gas for a total consideration of £0.3m, it announced on Tuesday.

The AIM-traded firm said the sale was in line with its strategy to focus on its high-impact portfolio of exploration licences in Atlantic Ireland, its existing producing assets onshore UK, and the pursuit of new ventures in its chosen areas of interest - specifically the Atlantic seaboard, North Africa and north west Europe.

It said the sale remained subject to the signing of a sale and purchase agreement - the terms of which had been agreed by both parties - and also approval by the Oil and Gas Authority.

The sale would be settled in cash which, under the terms of the proposed sale and purchase agreement, Europa would then immediately, simultaneously and irrevocably use to apply for ordinary shares in UK Oil & Gas equal to £0.3m divided by 1.156p per share.

Europa said the consideration shares issued to Europa would be subject to a six month orderly markets provision.

“The sale of our remaining interest in PEDL 143 demonstrates how we actively manage our portfolio of licences on a risk [and] reward basis,” said Europa chief executive officer Hugh Mackay.

“We will deploy corporate resources and capital elsewhere in our portfolio, mainly in monetising our industry-leading licence position offshore Ireland.

“Here gross prospective resources of up to 6.4 billion barrels of oil and 1.5 tcf of gas at our flagship Inishkea project have been identified, while farm-in negotiations are ongoing with a major international oil and gas company with a view to drilling up to three high impact wells from 2020 onwards.”

Mackay said the company was continuing to look to maximise production from its UK onshore assets, including its three producing fields and the Wressle discovery in the East Midlands.

“Finally, we are closing in on adding a new exploration project to our portfolio, a high impact, new venture in Morocco which, in terms of size and company-making potential, is on a similar scale to our Irish licences.

“With so much activity underway across our portfolio, I look forward to providing further updates on our progress.”