Europa Oil & Gas reports 'strong' year as it expands in Ireland

AIM-listed explorer Europa Oil & Gas said it delivered a “strong performance” for the year despite difficult market conditions with the low price of oil as it increased its presence in Ireland.

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Chief executive Hugh Mackay said: “In the face of difficult market conditions for the oil and gas sector we have delivered strong performance.

“We have reduced costs by one third, our UK production is set to double, we are preparing to drill a high impact well onshore UK at Holmwood, we have delivered three deals, landed seven new licences in the UK and Ireland and perhaps most importantly built a leading position in Atlantic Ireland.”

For the year ended 31 July, revenue fell 41% to £1.3m, compared to the previous year.

In response to market conditions, the company reduced operating costs by 33% and reduced administrative expenses by 39%.

Pre-tax loss widened 54% to £1.9m, after £1.2m exploration write-off in Béarn des Gaves in France, and the post-tax loss for the year widened by 11% to £1.6m.

Cash used in operating activities was flat at £300,000 and the net cash balance at the end of July fell 47% to £1.7m.

During the year the company proceeded with development of the Wressle discovery in north Lincolnshire with production expected to start early next year.

The company was granted three new UK onshore awards in 14th round and five new licensing options were awarded offshore near Ireland, which the company’ estimated it could produce 2.1bn barrels of oil equivalent and 1.5trn cubic feet of gas.

Following a transformer for Kosmos the company now owns the 100% interest for the FEL 2/13 and FEL 3/13 offshore licences in Ireland and the company secured a planning decision for the Holmwood site with preparatory work for drilling in 2017 underway.

During the year 123 barrels of oil equivalent per day was produced from UK onshore, down from 141 last year.

Mackay said the 2015 licensing round was the “most successful licensing round ever in Ireland” as oil companies had already begun work programmes.

He added: “We will continue to mature our Irish portfolio with the intention of delivering half a dozen drill-ready prospects – any one of which has the potential to be a company maker for Europa.”

Shares in Europa Oil & Gas were up 3.16% to 4.90p at 1311 BST and the price of Brent oil was down 0.1% to $50.14 and west Texas intermediate was down 0.041% $48.22 at 1402 BST.