RE: Hello29 Jan 2024 13:14
Posted on the other board by ohisay.
Tennyson today...FWIW
... Clearly with such a deadline and uncertainty overhanging Europa was unlikely to successfully attract a partner, however with this extension, and the evidence of support from the government, we believe its chances of bringing in a partner are now good. As with the UK North Sea, the Irish Government is unlikely to approve new licences for exploration, however existing permits are honoured, and there is a clear environmental case to utilise domestic supply over more carbon intensive imports. FEL 4/19 contains the large 1.5 Tcf Inishkea West prospect, which is close to existing infrastructure at Ireland’s only remaining, but declining Corrib gas field. A quick and relatively inexpensive tieback development at Inishkea West therefore could play a crucial part in the country’s energy transition, and we would expect an obvious (but far from only) candidate for farm-in to be the Corrib operator, Vermilion Energy. We value Inishkea West unrisked at over 20p/shr net to Europa, but naturally, as the licence neared the expiration date without extension, the commercial chances of success were falling by the day. Today’s extension has vastly improved these chances of a commercial development. Applying an overall (geological plus commercial) chance of success of 20%, we carry a risked valuation for Inishkea West of 4.15p/shr (of a risked Total NAV of 15.83p/shr, including Onshore UK 2P+2C, 1.2p/shr, Cloughton, 2.27p/shr and Equatorial Guinea 5.65p/shr). Each, individually, comfortably in excess of today’s share price of 0.9p/shr*.
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