RE: WA buys4 Aug 2023 07:50
Will Holland, Chief Executive Officer of Europa, said:
“We are very pleased to be assuming the operatorship of what we believe to be a material licence and plan to progress the asset to appraisal drilling operations as quickly as possible. This initially involves engaging with the various stakeholders to secure the necessary permits and approvals.
The Europa technical team is now working through the subsurface data to calculate a range of probabilistic recoverable gas volumes and will produce a conceptual development plan for the field, which we believe will demonstrate the material potential value of the licence. There is undoubtedly a significant volume of gas within the structure, which could be brought online relatively quickly and would displace imported gas volumes. Domestically produced gas generates employment, local and national tax revenues and has a lower carbon footprint than imported gas. As such development of Cloughton is fully aligned with the UK Governments British Energy Security Strategy and Net Zero 2050 goals.
I look forward to updating shareholders of our progress as we work through the asset data, refine our estimates for the gas volumes and establish a conceptual development plan.”
It transpires that Cloughton is a somewhat overlooked asset, it was in the portfolio gathering dust as a potentially tight gas play and historically with gas at 30p/Therm had marginal economics at best. At 50p or even higher Cloughton looks ‘very, very interesting’ according to Holland.
With Egdon agreeing to transfer the operatorship and letting the EOG team take it on means that whilst the subsurface team will be able to shoot some seismic and identify a well location for a potential drilling programme the above ground team may have to work somewhat harder.
“This is because there will be plenty of stakeholders judging the site location for the pad and given that it is an onshore UK greenfield development, engaging with the planners, landowners and of course coming up with a plan which will include all permitted activities. The deal is helped by the approval of the NSTA and of course any gas eventually produced would not only displace imported volumes but would enjoy a lower carbon footprint.
In addition to that, and especially after the recent Government announcement on hydrocarbon policy, the development would create local employment, contribute to the Exchequer both locally and nationally as well as meeting the UK Governments British Energy Security Strategy and Net Zero 2050 goals.
Although the company has not given any volumes in the RNS there does appear to be a possible economic amount, partly based on the 1968 well data but on it being labelled a favourable appraisal opportunity.
So, Europa has opened up what is clearly a sleeper and they would dearly love to land this with a well that demonstrates the reservoir can deliver commercial rates of gas, but it should be realised that the above ground proc
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