(Sharecast News) - Europa Oil & Gas said in its final results on Monday that, despite a lower oil price and a weaker pound, it maintained stable revenue at £6.7m for the 2023 financial year - a slight increase from last year's £6.6m.
The AIM-traded firm's gross profit showed significant growth in the 12 months ending 31 July, rising 53% to £3.4m, compared to £2.2m in 2022.
However, the company reported a pre-tax loss of £0.9m, primarily due to a non-cash impairment loss of £1.7m, swinging from a pre-tax profit of £1.4m year-on-year.
Europa recorded a net cash inflow of £2.8m from operating activities, compared to £2.5m in 2022, while its cash balance decreased to £5.2m from £8.3m at the end of the prior year.
On the operational front, Europa said its onshore UK net production increased 8% to 265 barrels of oil per day (bopd), mainly due to outstanding performance at the Wressle field.
Wressle saw gross production averaging 710 barrels per day throughout the year, with Europa's net share amounting to 213 daily barrels.
The board said adding three microturbines in early 2023 led to a 10% increase in oil production.
Additionally, new seismic data for the Wressle field suggested the potential for a significant increase in reserves from the Ashover Grit while a gas monetisation project was under development.
Europa said its offshore Ireland exploration efforts yielded promising results, with improved seismic data for the Inishkea West prospect.
The development had increased its chance of success, with the prospect within easy tie-back range of the Corrib gas field.
It said the farm-out process had been paused to enhance subsurface imaging further.
In the Central North Sea, Europa continued to work on the Serenity oil discovery alongside partner i3 Energy, with a potential development scenario could result in around 1,000 barrels of oil per day net to its 25% interest.
Additionally, Europa noted its participation in the UK Government's 33rd offshore oil and gas licensing round.
Regarding board changes, Simon Oddie retired as chief executive officer in March but remained on the board as a non-executive director.
William Holland was appointed CEO, and Alastair Stuart was appointed chief operating officer and executive director in April.
Since the end of the reporting period, Europa started installing a jet pump for artificial lift on the Wressle-1 well, with completion expected by the end of October.
It also relinquished PEDL 181 during September and applied to extend licence FEL 4/19 to continue reprocessing and secure a farm-in partner beyond 31 January.
"Europa made significant progress, both operationally and financially, during the 2022-2023 financial year, including continued development work at our flagship asset, the Wressle oilfield, which consistently performs above initial expectations," said chief executive officer William Holland.
"As planned, we have initiated multiple projects designed to increase oil production and gas monetisation from the field, and in the first half of the year, we executed the initial phase of the gas utilisation project, which has led to a 10% increase in oil production.
"Even though Wressle is already exceeding expectations, having produced 710 barrels of oil per day during the financial year, we remain focused on realising the full potential of the field, with the completion of these additional projects and drilling the Penistone horizon being one of Europa's priority medium-to-long-term projects."
Holland added that the company continually assessed further opportunities to diversify its asset portfolio.
"We are encouraged by the reaffirmation of UK Government support for offshore and onshore hydrocarbon exploration and production and remain optimistic about our future growth prospects."
At 0831 BST, Europa Oil & Gas Holdings shares were up 4.44% at 1.175p.
Reporting by Josh White for Sharecast.com.
Europa Oil & Gas (EOG)