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(Alliance News) - Europa Oil & Gas PLC has been awarded an exploration covering a "large, under-explored" area of the Agadir basin in Morocco, it said on Wednesday.
The focus on the offshore licence will be the Lower Cretaceous fan sand play, which has already produced "prolifically" in West Africa.
Europa will get 75% of the eight-year licence, which covers 11,228 square kilometres between depths of 600 metres and 2,000 metres, with Morocco's government holding the rest.
"Europa has identified the key elements required for a working hydrocarbon system, namely source, reservoir and seal, are all present in the licence area. In addition, a number of large structural traps located on the edges and above salt diapirs have already been identified throughout the permit area," said the company.
"Europa plans to mature several of these stacked prospects, which each have the potential to hold over 250 million barrels of oil, to drillable status with a view to attracting one or more farminees to drill an exploration well in the second phase of the licence."
Europa said only 10 wells have been drilled in deepwater Morocco, and only three into the Lower Cretaceous horizon. Given deepwater areas extend for nearly 2,000 kilometres off the country's coast, this shows the region is "highly" under-explored, it added.
Chief Executive Hugh Mackay commented: "The Inezgane permit in Morocco is an excellent technical fit with Europa's substantial licence position in the Porcupine basin in Ireland where, among other plays, we are also targeting the Lower Cretaceous, a prolific producer in West Africa.
"In terms of our investment criteria, Morocco ticks all the boxes: a stable country with a transparent business environment; excellent fiscal terms; and low political and regulatory risk. From a technical, commercial and strategic perspective Morocco therefore represents an obvious new country for Europa's technical team to deploy the first-rate knowledge and understanding of Lower Cretaceous plays it has gained through its work across our industry-leading licence position in offshore Ireland."
Europa shares were 8.3% lower on Wednesday afternoon at a price of 2.20 pence each.
