Member Info for bobbybee

While they are geologically discrete and considered independent (i.e. no conditional probability), the three prospects can be tested from one single wellbore and two sidetracks. This has a number of advantages – it significantly reduces drilling costs per well, improves overall chances of commercial success assuming only one ‘mother-bore’ is drilled (91% on the basis that at least one of the three prospects exceeds the economic threshold of 38 mmboe), and arguably most importantly makes the farm-in a far more attractive proposition. Preliminary scoping suggests that all three prospects can be drilled for US$50m, versus one vertical well which would cost an estimated US$30m. Assuming a farm out around midyear 2024, we would expect drilling during H1 2025. Terms of the deal Europa is investing US$3m of new equity into Antler, acquiring a 42.9% interest in the private company. Antler and Europa will appoint one Board member each, with all Board decisions to be unanimous. The funds from the raise will cover the work programme and budget for the first year, which includes the formal farm out process. Value proposition and funding Using DCF we value the prospects on a unit basis at US$6.13/boe (NPV10, US$65/bbl long term Brent oil price, US$6.5/mcf gas price). The “A” prospect is the largest of the three, with 686 bcfe (114 mmboe) gross recoverable in the P50 case. Prospect “B” has some 365 bcf (61 mmboe) recoverable, and “C” 186 bcf (31 mmboe). In total, therefore, there are some 1.24 Tcf (206 mmboe) of recoverable P50 prospective resources to be tested. On an unrisked basis, using our US$6.13/boe valuation, we estimate an NPV10 of up to US$352m (net to EOG on a fully diluted basis). For an initial outlay of just US$3m, therefore, Europa is acquiring exposure to a project which could, on paper at least, deliver almost 120x return.

Wet gas from Alen is produced via a fixed platform to the Aseng FPSO, where it is lifted periodically. Dry gas is sent via a new 24-inch 950 mmscf/d capacity export pipeline to the Alba LNG plant on Bioko Island. Since these facilities are available, with ullage, only around 10km away, production from EG-08 could potentially be tied back to the Alen platform, with a tariff being paid to Chevron for the use of the infrastructure. The LNG terminal on Bioko Island was recently upgraded, with the hope that new finds in the area can backfill supply as Alba, Aseng and Alen naturally decline.

Near term activity EG-08 is covered with modern 3D seismic which will allow Antler and Europa to rapidly work up drilling targets and start a formal farmout process in early 2024. It is clear that the regional productive reservoirs have a strong AVO anomaly response, and it is on this basis that all existing discoveries to date have been drilled. With the “A”, “B” and “C” prospects all displaying ‘classic type 2 anomalies’ (see Figure 2, above), the EG-08 partners are carrying high geological chances of success (in the region of 60-70%). The estimated volumetrics for the three prospects is summarised in Figure 3, below. These numbers are on the basis of a gas condensate find, which is considered the most likely phase, however we understand that an oil case is also being considered a possibility.

Licence EG-08 EG-08 was originally part of a larger permit, Blocks O&I, originally awarded to Noble Energy and later acquired by Chevron following its takeover in 2020. EG-08 was carved out as part of a mandatory relinquishment following the commercial development of the Alen and Aseng fields in the other half of the licence. Current operator Antler acquired the new PSC earlier this year, with state ratification in October. Antler has two years to secure funding and commit to drilling (i.e. farm down the licence), at which point it moves into the second exploration sub period which will see drilling activity. Antler has a 80% interest in the PSC with the state company GEPetrol having a 20% stake. The neighbouring Chevron licence contains two producing fields – Alen and Aseng – which contain around 700 bcfe of recoverable reserves and has produced just shy of 100,000 boepd (combined) at peak production but is now well into the decline phase. The Aseng field was discovered in 2007 and achieved first production in 2011. Alen followed shortly after, with production beginning in mid-2013. There are also the currently undeveloped discoveries Diega, Yoyo-Yolanda and Carla North, which have tested oil, gas and condensate. A total of 17 wells (exploration, appraisal and development) have been drilled in the area, the gas wells proving flow potential of over 30 mmscf/d gas and 1,500 boepd condensate, and oil wells over 6,000 bopd. Only one well was drilled into EG-08. The O2 well was drilled downdip of prospect “C” (see Figure 2, below), and while it was technically dry, it did prove a thick (55m) porous reservoir with some condensate recovered at the top of the section. This provides optimism for updip potential.

Europa Oil & Gas

MAKING MOVES

Europa Oil & Gas (EOG LN) has announced that it has secured a new investment in private E&P Antler Global, including an 80% operated stake in the low risk/high impact EG-08 exploration licence, offshore Equatorial Guinea. Europa has invested US$3m in new equity into Antler, securing a 42.9% stake in the company and providing funds to prepare the asset for farm out. The licence contains substantial lookalike structures to commercial developments, less than 10km away, with P50 prospective resources of 206 mmboe (gas condensate expected) across three prospects. Importantly, of the 17 wells that have been drilled in the immediate area, only one was found dry, illustrating the low regional geological risks – with the chance of success estimated by Europa at 60-70% for each individual prospect. With infrastructure nearby available for tiebacks, the economic threshold is relatively low (estimated at 38 mmboe). As such, the chance of an economic development from at least one prospect is as high as 91%. Applying substantial discounts to reflect the risks and dilutive effect of farming down the asset in return for drilling and development finance, we calculate a risked NPV10 of the EG assets of US$70m net to EOG, equivalent to 5.67p/shr. Illustrating the scale of the upside unrisked this rises above US$350m (28p/shr). Aside from the value implications, we see this move as a statement of intent from Europa, shrewdly deploying its cash at an opportunistic time, where equity finance for small projects is hard to find but the industry starting to show signs of renewed appetite for reserve replacement opportunities. We have updated our NAV table, calculating a sum of parts derived risked Core NAV of 3.76p/shr (discovered resources only) and a risked Total NAV 15.83p/shr. Our updated Target price of 4.97p/shr offers almost 5x upside from the current share price.

Https://youtu.be/IY7jFVRCVbA?si=-g7PjnmBORqUBl5d

Well hopefully todays news will start to invigorate the share price and those that want to exit can leave and those that see an opportunity can buy in.

Of course they’ve got to find a farm in partner,we’re a junior e&p company.

After todays news I’d say they are performing.How long do you think this deal has been on the cards for.They don’t happen over night.

Https://www.europaoil.com/operations/equatorial-guinea/

It’s dollars not pounds to start with.It’s also in instalments.

Antler's block adjoins the Etinde Block discoveries in Cameroon, and the Aseng and Alen producing fields in Equatorial Guinea operated by Chevron. Antler has defined drill targets across its license which are analogues and contiguous to those of the proven [prolific] discoveries in the adjoining blocks.

Drilling preparation is underway, and discovery by Antler could be developed quickly with offtake to Chevron's nearby Aseng platform where hydrocarbons will be processed, transhipped and exported via tariff arrangements through the Chevron infrastructure to an FPSO (liquids) with gas going via the Chevron pipeline to the Alba Plant gas facility on Bioko island for further liquid extraction and gas sales, including LNG.

Probably worth having another look at this from a couple of months ago.

https://youtu.be/m2agwK_Lns8?si=uDf1t7CeEqXGYnqp

3h Twitter

Update from Wressle (#EOG: 30%).

As there is no water disposal on site, the produced water is now being disposed in a nearby well but we needed

@EnvAgency

permission to do so.

Before we had this EA permit, 550bopd was as much as we could handle."

Https://youtu.be/NZYPGupliZE?si=01F55Dp1AIpeaUBk

Quite a cryptic statement from Malcy

“Obviously the same asset but with a slightly lower interest this will deliver for EOG as it will for UJO and Will Holland and team will also have the luxury of a potentially bigger payday with which to build up Europa. With a number of projects in mind I think that it will be an interesting ride for shareholders.”

Https://www.malcysblog.com/2023/12/flash-bloggenel-touchstone-ujoeog-petro-matad/

Gardener….it’s not just EOG whose share price is in the doldrums.Take a look at most share charts for juniors E&P companies. Also in fairness to WH he has tried more than most CEO’s to promote the company. I’ve taken the opportunity to top up quite considerably at this level over the last couple of months, whether that will be a wise decision remains to be seen.

Thanks for posting Tony, really interesting read.

Plus hopefully the long awaited CPR.

Https://twitter.com/europaoilandgas/status/1734201333681394025?s=46&t=yb4bY8lQ32WiMrlMFx8_yQ

My point being more that he must have been confident on the company moving forward and those running it.He certainly had a lot more information than us to base his purchase on.