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(Sharecast News) - Europa Oil & Gas announced on Wednesday that the Moroccan regulatory body, the Office National des Hydrocarbures et des Mines (ONHYM), has granted a one-year extension to the initial phase of the Inezgane exploration permit, to November 2022.
The AIM-traded firm said the extension was granted for the time lost as a result of the Covid-19 pandemic, and would enable it to complete its ongoing technical work programme.
It said that work was focussed on further de-risking 30 prospects and leads, which it estimated had the potential to hold close to 10 billion barrels of unrisked oil resources.
Europa holds a 75% interest in, and operatorship of, the licence, which covers an area of 11,228 square kilometres in the Agadir Basin, with ONHYM holding the remaining 25% interest.
Since the award of the licence in November 2019, activity had been centred on interpreting "extensive" 3D seismic legacy data to de-risk large prospects in the Lower Cretaceous play.
Of the 30 prospects and leads identified to date, 14 were prospects with mean estimated resources in excess of 150 million barrels of oil equivalent each.
Those prospects had stacked reservoir potential, and included a "wide range" of structural styles including, for example, four-way dip closures in the case of the 827 million barrels of oil equivalent Falcon and 204 million barrels of oil equivalent Turtle prospects.
Europa said it had assigned a geological chance of success to those prospects of between 20% and 35%.
Ongoing work was focused on seismic reprocessing and further de-risking the prospects and leads which had been mapped to date.
The board said the forward plan was to build a "robust prospect inventory" and, subject to the results, secure partners to drill wells.
A farm-out process would be formally launched following completion of the technical work programme, however the firm said it was continuing to maintain dialogue with three companies,, all of which had expressed interest in Inezgane.
The original duration of the Inezgane Permit was eight years, comprising three exploration phases, of which the initial phase was two years.
Following the extension, the initial phase would now run for three years, and the duration of the Inezgane licence across the three exploration phases was now nine years.
At the end of the initial phase, Europa said it had the option to commit to drilling an exploration well in the second phase, or to relinquish the licence.
"We are extremely grateful to the Moroccan authorities for their swift response to the challenges posed by the global pandemic and specifically for granting us a one year extension to the initial phase of the Inezgane licence," said chief executive officer Simon Oddie.
"The equivalent of approximately 50 UKCS North Sea blocks, Inezgane covers a large area in the Agadir basin and, while much work has already been carried out despite Covid-19, this extension will enable us to build on the encouraging results seen to date, the highlights of which include the mapping by Europa of up to 10 billion barrels of unrisked oil resources.
"Inezgane is living up to the promise we identified when we first applied for the licence."
Oddie said that, with the extension granted, the firm was now focused on completing the technical work ahead of securing a partner or partners with which it could work to realise the licence's "substantial" potential.
"Together with ongoing work to bring the Wressle Oil Field in Lincolnshire online later this quarter, which will more than double our production to over 200 barrels of oil per day, the months ahead promise to be an exciting period for Europa.
"I look forward to providing further updates on our progress as we look to deliver on our twin objective to expose our shareholders to high impact exploration activity, while at all times looking to minimise risk by scaling up our UK onshore production profile and securing partners to drill wells."
At 0911 BST, shares in Europa Oil & Gas Holdings were up 15.79% at 1.1p.
Today 20:29
IN BRIEF: Europa Oil & Gas withdraws from UK offshore licensing round
Europa Oil & Gas (Holdings) PLC - UK and Ireland-focused oil and gas exploration, development and production company - Updates on the company's application for a licence as part of the 33rd UK Offshore Licensing Round that closed in January. Says the North Sea Transition Authority proposes a marriage between Europa and another party for the Licence. But, Europa decides not to accept the proposed marriage and also notifies the NSTA that, if the NSTA subsequently decide to award the Licence, in its entirety to the company as the sole owner, Europa would decline the offer. Europa explains that since its original application various aspects of the operating conditions and the fiscal environment have changed and remain uncertain. This reduces the economic and strategic attractiveness of the licence. As such, Europa believes that its resources are better deployed on its existing assets and looking for new opportunities within its core areas of focus.
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