Europa Oil & Gas Regulatory News (EOG)

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas 6 October 2014 Europa Oil & Gas (Holdings) plc (`Europa' or `the Company') Final Results for the year to 31 July 2014 Europa Oil & Gas (Holdings) plc, the AIM listed oil and gas exploration,development and production company focused on Europe, announces its finalresults for the 12 month period ended 31 July 2014. The full Annual Report and Accounts will be available today on the Company'swebsite at www.europaoil.com and will be mailed to those shareholders who haverequested a paper copy in October 2014. Operational highlights * Produced 165 boepd from three UK onshore fields * Completed 3-D seismic acquisition programme offshore Ireland, completed seismic processing and commenced prospect mapping * Received a favourable judgment at the Court of Appeal for Holmwood planning * Spudded the Wressle well on 19 July 2014 * Extended PEDL181 licence to 30 June 2015, obtained drill site and submitted planning application for Kiln Lane well * Renewed Béarn des Gaves permit to 22 March 2017 * Renewed Tarbes val d'Adour permit to 18 January 2015 * Raised £3.7 million net proceeds via a placing and oversubscribed open offer * Disposed of Romanian subsidiary for a nominal sum Financial performance * Group revenue of £3.9 million (2013: £4.5 million) * Pre-tax profit from continuing operations excluding exploration write-off and impairment of £0.5 million (2013: £0.7 million) * Pre-tax loss from continuing operations of £0.7 million (2013: profit £0.5 million), after a £1.2 million impairment against the West Firsby field * Post-tax profit for the year £0.6 million (2013: loss £0.1 million) * Cash generated from continuing operations £1.4 million (2013: £1.7 million) * Net cash balance as at 31 July 2014 £4.5 million (31 July 2013: £0.7 million) Post reporting date events * Kiln Lane well submitted for EA permitting, main well contracts being awarded * Announced that the Wressle well found 30 metres of potential hydrocarbon pay, production testing to commence later in 2014 * Application submitted to extend the Tarbes val d'Adour permit to at least 2018 Europa's CEO, Hugh Mackay said, "The next six months are going to be veryexciting for Europa. We will be production testing the Wressle well, drillingthe Kiln Lane exploration well and hopefully finding 2.9 mmbo of oil, andperhaps most importantly getting the prospect inventory for our Irish licencesand issuing a CPR. In parallel we are working to add new prospects and projectsto the portfolio through corporate activity and participation in licensingrounds including the 14th UK onshore, the Irish Atlantic and others aroundEurope. In due course we will get greater clarity on Irish drilling plans. Weare focused on generating significant value for our shareholders and I lookforward to providing updates on our progress in the year ahead" Chairman's statement Europa is an exploration and production company with a portfolio of multi-stageprojects in three core areas: onshore UK; offshore Ireland; and onshore France.The year under review saw Europa commence a multi-well programme focused onproving up our prospect inventory via the drill bit. We have embarked on anexciting phase in the development of our Company, one which, subject to theresults, could see us deliver on our objective to build a top quartile AIMcompany in terms of market capitalisation. Our drilling campaign got off to a good start in July with the Wressle-1exploration well in East Lincolnshire, which was targeting a 2.1 mmboconventional oil prospect, finding hydrocarbons. The stratigraphy encounteredduring drilling were in line with our pre-drill geological forecast andformation evaluation from log data indicated the presence of reservoirs thatmay contain hydrocarbons with sufficient porosity and permeability to flow atcommercial rates. In all, over 30 metres of potential hydrocarbon pay have beenidentified in three main intervals. Testing is now required to determine if wehave made a commercial discovery and this is scheduled to commence later thisyear. Wressle will be followed by the drilling of the 2.9 mmbo Kiln Lane prospect onthe neighbouring PEDL181 licence. Kiln Lane is a larger prospect than Wressleand a discovery on this previously undrilled licence would open up a newconventional oil and gas play and significantly de-risk additional leadsidentified on the licence. These additional leads would then become strongcandidates for follow-up drilling. Furthermore, despite being a conventionaloil exploration well, Kiln Lane may also provide information with which toassess any unconventional hydrocarbon prospectivity elsewhere in this large 540km2 licence. Needless to say, we are keen to drill more wells onshore UK and, subject to theresults of Wressle and Kiln Lane, 2015 could see us undertake further drillingon already identified prospects on these licences. In addition, we will beparticipating in the upcoming 14th Onshore (Landward) Oil and Gas LicensingRound. Still in the UK, following favourable rulings by both the Court ofAppeal and the High Court in relation to drilling a temporary exploratory wellat the Holmwood prospect on the PEDL143 licence, we remain hopeful that we maybe in a position to drill within the next 12 months, subject to a favourabledetermination by the Planning Inspectorate at a planning inquiry and availablefunding. PEDL143 is located in the Weald Basin, Surrey and with mean grossun-risked prospective resources of 5.6 mmbo, as estimated in a CPR published inJune 2012, and with a one in three chance of success we rate Holmwood as beingone of the best undrilled conventional prospects onshore in the UK. While a discovery in the UK would result in a significant increase in ourproduction generated revenues, our offshore Ireland and onshore France licencesare the potential company-makers in our portfolio due to the size of theprospectivity identified. Here too considerable progress has been and continuesto be made with regards to drilling these large prospects. In the SouthPorcupine Basin Offshore Ireland, where we previously mapped billion barrelprospects using historic 2D data, a 1,500 km2 3D seismic acquisition programmeover our two licences was completed by the operator, Kosmos Energy, in October2013. Kosmos are due to deliver a new prospect inventory based on this new datain Q4 2014. Upon receipt, Europa will commission an independent CompetentPerson's Report covering our Irish licences. Whilst Kosmos have made nocommitment to drill yet they have begun preparatory work to enable them to usethe Atwood Achiever drillship in Ireland and subject to the quality of theprospect inventory could elect to drill a first well offshore Ireland in 2016.Under the terms of our farm-out agreement, Europa's share of drilling costs fora first exploration well on each licence would be funded by Kosmos subject to acap of either US$90 million in FEL 2/13 and or US$110 million in FEL 3/13. Inour view an election to drill on our licences offshore Ireland is avalue-trigger event. We estimate the minimum economic prospect size to be 100±20 mmbbls so if Kosmos do elect to drill, Europa will have a carried 15%interest targeting company-making volumetrics. In France, both our onshore licences were successfully renewed during the yearunder review. Europa holds 100% interests in the Béarn des Gaves (`Béarn') andTarbes val d'Adour (`Tarbes') permits, located in the proven Aquitaine Basin.Of the two, Béarn is the potential company-maker thanks to the 107 bcf BerenxShallow gas prospect and the 500+ bcf Berenx Deep gas appraisal project. Sincethe permit was renewed in October 2013 we have continued to obtain andreprocess seismic and enhance our geological model which has further refinedthe shallow and deep prospectivity. Whilst the mean unrisked resources of theshallow prospect are now 107 bcf, the resultant prospect is more robust and hasenhanced technical credibility. Having augmented our model and upgraded theprospectivity, we have re-engaged with interested parties. In tandem with thisprocess, we continue to advance well planning and permitting to drill theshallow prospect so that drilling operations can commence at the earliestopportunity. We have submitted an application to extend the Tarbes permit anddiscussions with a potential partner are on-going. During the period we exited the UK PEDL150 licence, and disposed of ourRomanian subsidiary for a nominal sum. For the third consecutive year, our three UK onshore fields hit their twelvemonth production target, this year producing an average of 165 boepd andgenerating £3.9 million in revenues (2013: 182 boepd and £4.5 million). Asthese are mature fields, production is in long-term decline but thanks to ouractive field management programme we have improved operational performance,resulting in lower costs. Cash generated from continuing operations for theyear was £1.4 million (2013: £1.7 million). In January, we completed a placing of shares and an oversubscribed open offerto existing shareholders which together raised £3.7 million after expenses. Wealso collected a £0.3 million cash payment from Kosmos in connection with theirfarm-in to our Ireland licences. In total our cash balances at the period endstood at £4.5 million (2013: £0.7 million). We have recorded a £1.2 million (2013: nil) impairment of the West Firsby fieldwhich arises from the lower assumed production rates used in the cash flowmodel. The sale of our Romanian subsidiary allowed the write-back of a £0.6 millionVAT creditor. We have one well in the UK about to undergo production testing, another well oncourse to commence in Q4 2014, and anticipate a new prospect inventory and CPRfor offshore Ireland, which we expect will confirm the company-making potentialof our licences. In addition, we are working to secure a farm-out for our 100%owned French permits. We will be participating in the upcoming UK and Irishlicensing rounds, and we will continue to evaluate new projects and venturesthat match our investment criteria. With all this activity in mind,shareholders can look forward to an exciting year ahead; one which we areconfident will result in significant value creation, as we focus on monetisingand growing our high quality asset base. I was delighted to announce the appointment of Colin Bousfield to the Board inFebruary. His extensive track record in securing debt and equity finance foroil and gas operating companies of all sizes, as well as his successful tenureas CFO for Composite Energy, makes Colin a valuable addition to our team. Finally, I would like to thank the management, operational teams, the Board andadvisers for their hard work and also our shareholders for their continuedsupport over the year. WH Adamson, Chairman Operational review Ireland - Porcupine Basin Frontier Exploration Licences (`FELs') 2/13 and 3/13- Europa (15%); Kosmos (85% and operator) The exploration model for these licences is the Cretaceous stratigraphic play:comprising Early Cretaceous turbidite sandstone reservoirs; charged by matureLate Jurassic and Early Cretaceous source rocks and contained in stratigraphictraps with elements of structural closure. The Cretaceous play in Ireland isessentially undrilled and is considered to be analogous to the same play in theequatorial Atlantic Margin province that has delivered the Jubilee and Mahoganyoil fields. Europa's interpretation of pre-existing 2D seismic identified two previouslyunknown prospects in the Lower Cretaceous stratigraphic play: Mullen in FEL 2/13 and Kiernan in FEL 3/13. The Company estimates these to have gross meanun-risked indicative resources of 482 million barrels of oil and 1.6 billionbarrels of oil equivalent respectively (see press releases dated 6 November2012 and 16 January 2013 for further information). Under the terms of the farm-in, Kosmos fully funded the costs of a 3D seismicprogramme over both FELs and for which acquisition was completed in October2013 and final processed data delivered in April 2014. Kosmos has advised thata new prospect inventory based on the interpretation and mapping of the 3D datawill be completed and delivered to Europa in Q4 2014. Upon receipt of this,Europa will commission a CPR to provide a third party assessment of theprospectivity of the two licence blocks. The 3D seismic is a highly significantfirst step towards realising the hydrocarbon potential of the basin and has thepotential to substantially de-risk the prospects, particularly if features likeconformance, flat events and AVO anomalies are observed on the data. It is anticipated that the indicative resources previously provided to themarket will change according to the vastly improved prospect mapping arisingfrom the state of the art 3D data now available over the licences. Wenevertheless expect that the prospect sizes will remain large to very large andthe quantum of resources is likely to be hundreds of millions of barrels. Wealso anticipate that the geological risk will be significantly reduced from the1 in 10 previously assigned based on the historic 2D seismic as we matureprospects to drillable status with the new 3D data. Subject to the results of the prospect inventory, Kosmos may elect to drill awell as early as 2016 and in which Europa will have a 15% carried interest.Under the terms of the farm-out, Kosmos will incur 100% of the costs of thefirst exploration well on each licence. The first exploration wells on FEL 2/13and FEL 3/13 have investment caps of US$90 million and US$110 millionrespectively. Costs in excess of the investment cap would be shared betweenKosmos (85%) and Europa (15%). The technical insights that Europa continues to gain from its work in the SouthPorcupine Basin provides a competitive edge that the directors will seek toexploit through participation in the 2015 Atlantic Margin Licensing Round thatopened in June 2014. France - Béarn des Gaves 100% Europa holds a 100% interest in the onshore Béarn des Gaves permit in theAquitaine basin, the heartland of the French oil industry. The permit containstwo prospects: Berenx Deep and Berenx Shallow. Berenx Deep is an appraisalproject having previously been explored and drilled by EssoRep with two wells,Berenx-1 (1969) and Berenx-2 (1972), both encountering strong gas shows over a500 metre thick gas bearing zone. In 1975 Berenx-2 was re-entered, drill stemtested and flowed gas to surface from the same carbonate reservoir thatdelivered 9 tcf and 2 tcf from nearby fields at Lacq and Meillon. Europa's in-house technical work indicates that the Berenx deep appraisalprospect could hold in excess of 500 bcf of recoverable gas resources. In a CPRdated 31 May 2012, ERC Equipoise estimated gross mean un-risked resources of277 bcf for the Berenx deep gas play. The difference between Europa's and ERC'sassessment of resources reflects the confidence of each party in mapping in ageologically complex terrain. Europa was able to map a larger area of closureand as a consequence larger resources. Thorough re-evaluation and interpretation of existing seismic and well data onthe permit has resulted in the definition of a new shallow gas prospect, BerenxShallow. Previous exploration on the concession had focused only on the deepgas prospectivity. A comprehensive review of historic well results, the recentdiscovery of previously missing seismic data by the French authorities,together with a substantial seismic reprocessing project has delivered are-interpretation of structure and better understanding of proven hydrocarbonbearing reservoir distribution in the shallow Cretaceous and Late Jurassiccarbonate sediments. This has resulted in a stronger technical interpretationand the resultant prospect is more robust and has enhanced technicalcredibility Europa has confirmed the Berenx Shallow gas prospectivity andsuggests potential gross mean un-risked resources of 107 bcf. The Company's strategy for Béarn des Gaves is to first target the shallow gasplay, drill a well with the aim of delivering a commercial flow rate and, onthe back of commercial success, to further appraise the shallow prospectivityand undertake work to de-risk the Berenx Deep appraisal prospect. The shallowprospect can be tested with a comparatively simple exploration well with ananticipated total depth of 2,500 metres. On 3 October 2013, the permit was successfully renewed for a period of fiveyears from 22 March 2012 and carries an expenditure commitment of approximately€2.5 million. A farm-out process for the permit is currently underway in tandemwith well planning and permitting for a well location on Berenx Shallow aheadof drilling in the next 18 months. A wellsite has been identified and a leasehas been prepared. Scoping economics suggests a value of US$11.5 boe and NPV10of US$170 million therefore the Directors believe that exploration success atBerenx Shallow would be a company maker for Europa. France - Tarbes val d'Adour 100% Europa holds a 100% interest in the Tarbes val d'Adour permit (`Tarbes'), inthe proven Aquitaine Basin, onshore France. We received notification during thereporting period that the permit was extended for three years from 18 January2012 until 18 January 2015. Tarbes contains several oil accumulations that werepreviously licensed by Elf but were abandoned in 1985 due to a combination oftechnical issues and low oil prices. Two fields, Jacque and Osmets, weredrilled using vertical wells which generated modest production levels and as aresult Tarbes is classified as an appraisal project. A farm-out process hasbeen launched, discussions with a potential partner are ongoing and anapplication to extend the permit to at least 2018 has been submitted to theFrench authorities. UK - NE Lincolnshire - PEDL180 33.3% (Wressle) PEDL180 covers an area of 100 km2 of the East Midlands Petroleum Province 5 kmsoutheast of the Europa operated Crosby Warren field which has been producingoil for 28 years. Europa has a 33.3% working interest in the block with itspartners Egdon Resources (operator, 25%), Celtique Energie Petroleum Ltd(33.3%) and Union Jack Oil (8.3%). The Wressle-1 conventional exploration well spudded on 19 July 2014 targeting aconventional prospect estimated by the operator to hold mean gross un-riskedrecoverable resources of 2.1 mmbo. The well reached a total depth of 2,240metres (1,814 metres TVDSS) on 23 August 2014. Both the stratigraphy and reservoir horizons encountered by the well were inaccordance with the pre-drill geological forecast which was based on 49 km2 of3D seismic acquisition acquired in 2012. Preliminary petro-physical evaluationof MWD (measurement whilst drilling) log data has indicated that hydrocarbonswith sufficient porosity and permeability to flow at commercial rates arepresent. In all, over 30 metres measured thickness of potential hydrocarbon payhas been identified in three main intervals: Penistone Flags with up to 19.8metres measured thickness (15.9 metres vertical thickness) of potentialhydrocarbon pay; Wingfield Flags with up to 5.6 metres measured thickness (5.1metres vertical thickness) of potential hydrocarbon pay; and Ashover Grit withup to 6.1 metres measured thickness (5.8 metres vertical thickness) ofpotential hydrocarbon pay. Elevated mud gas readings were observed over largeparts of the interval from the top of the Penistone Flags reservoir target(1,831 metres MD) to TD. The three reservoirs will be further evaluated by well testing to define fluidtype(s), reservoir properties, production rates and commerciality. The well hasbeen completed with a 4 ½" liner to enable selective and sequential testing ofthe intervals as part of an extended well test, for which planning consent isalready in place. Test operations using a work-over rig are expected tocommence later this year. UK - NE Lincolnshire - PEDL182 33.3% (Broughton) PEDL182 covers an area of 40 km2. The Broughton prospect was previously drilledby BP and flowed oil. The May 2012 Competent Person's Report (`CPR') estimatedthe Broughton prospect to hold mean gross un-risked recoverable resources of1.85 mmbo. Broughton is located on trend with the producing Crosby Warren oilfield and the Wressle prospect on PEDL180. Subject to the results of theplanned production test of the Wressle-1 exploration well, the partners mayelect to drill the Broughton prospect. UK - NE Lincolnshire - PEDL181 50% (Kiln Lane) Europa has a 50% interest in and is the operator of the PEDL181 licence, withEgdon Resources UK Limited and Celtique Energie Petroleum Ltd, each holding a25% interest. PEDL181 is located in the Carboniferous petroleum play and coversan area of over 540 km2 in the Humber Basin. The licence has good potential for conventional oil and gas and unusually forthe East Midlands Petroleum Province has never been previously drilled. Thelicence is located in a working hydrocarbon system where a number ofdiscoveries have been made along the Brigg-Broughton anticline, includingEuropa's existing oil production at the Crosby Warren field at the westernmostend of the anticline. Technical evaluation has confirmed several conventional prospects and leads inPEDL181. Four of these in the southern part of the licence were the focus of a78 km 2D seismic acquisition programme that was completed in April 2013.Reprocessing of 150 km2 of existing 3D seismic data together with processing ofthe new data resulted in the maturing of a drill ready prospect, Kiln Lane,with gross un-risked prospective resources of 2.9 mmboe. In January 2014 a oneyear extension to the licence to June 2015 was secured and that will enable anexploration well to be drilled at Kiln Lane later this year. A drillsite hasbeen leased and both the planning and EA Mining Waste Permit applications havebeen submitted and are being processed by the relevant authorities. In addition to the conventional prospectivity the Humber basin may also haveunconventional hydrocarbon potential. Interpretation of the new seismic datasuggests that this basin may contain a much thicker sequence of Namurian agesediments than was previously thought. The content of this sedimentary packagein the Humber basin is not known. The Namurian section in the GainsboroughTrough, located some 25 km to the west of PEDL181 has been drilled and is knownto host the Bowland Shale which has well-documented potential for shale gas. Itis possible that the Namurian section in the Humber basin may contain a BowlandShale equivalent with similar potential to be both the source rock for theconventional hydrocarbons in the licence area, and perhaps also have somepotential for unconventional hydrocarbons. UK - Dorking area - PEDL143 40% (Holmwood) The PEDL143 licence covers an area of 92 km2 of the Weald Basin, Surrey. Europais the operator and has a 40% working interest in the licence with partnersEgdon Resources (38.4%), Altwood Petroleum (1.6%), and Warwick Energy (20%).The Holmwood prospect is a conventional Jurassic sandstone reservoir with a lowgeological risk. The May 2012 CPR estimated Holmwood to hold gross meanrecoverable resources of 5.64 mmbo. Europa considers Holmwood to be one of thebest undrilled conventional exploration prospects in the UK. The prospect lies south of Dorking within the Surrey Hills Area of OutstandingNatural Beauty. An application to construct a temporary exploration well on thesite was originally made in 2008. This application was refused in 2011 bySurrey County Council contrary to their planning officer's recommendation toapprove. An appeal to overturn the decision was heard at a public inquiry inJuly 2012. The appeal was dismissed on 26 September 2012. Europa, along with its partners, applied for an order to quash the decision ofthe Secretary of State for Communities and Local Government's appointedInspector to dismiss the appeal. On 25 July 2013, the Royal Courts of Justicegave judgment in favour of Europa and quashed the Inspector's decision. Anappeal was submitted to the Court of Appeal which was subsequently dismissed bythe Court on 19 June 2014. As a result, Europa's appeal against Surrey CountyCouncil's refusal to grant planning permission to drill one exploratoryborehole and undertake a short-term test for conventional hydrocarbons at theHolmwood prospect has been remitted to the Planning Inspectorate forredetermination. This will involve a further planning inquiry in the first halfof 2015. UK - Lincolnshire area - PEDL150 100% (Hykeham) During the year the Group completed the abandonment of the Hykeham well andrelinquished the licence. UK - Production (West Firsby 100%; Crosby Warren 100%; Whisby W4 well 65%) The three UK fields produced an average of 165 boepd (2013: 182 boepd) duringthe year under review, the third consecutive year the full year productiontarget was met. We recorded a £1.2 million impairment of the West Firsby fieldarising from lower production rates used in the cash flow projections and inaccordance with the predicted decline forecast for the field. UK - Unconventional resources - Shale Gas As previously noted PEDL181 may have some potential for shale gas. Romania In July 2014, the Company announced the completion of the sale of its entireholding in the issued share capital of the Romanian subsidiary Europa Oil & GasSRL for a nominal sum. The subsidiary held interests in onshore concessions inRomania which had been relinquished, or were in the process of receivinggovernment approval for such relinquishment. The assets were written down tonil value in the Group's financial statements for the year to 31 July 2012. Thesale marks the termination of the Company's involvement in Romania. Results for the year The Group loss for the year after taxation from continuing activities was £368,000 (2013 loss: £54,000). The profit on discontinued activities was £933,000 (2013: loss £47,000). Conclusion Having commenced our drilling programme in July with the Wressle well, we areworking hard to build and maintain a pipeline of drilling activity across ourasset base. We are already funded to drill the Kiln Lane prospect in Q4 2014and, subject to an election to drill by Kosmos, we have a free carry for twohigh impact wells, one on each of our licences offshore Ireland, the first ofwhich could be drilled as early as 2016. On-going farm-out discussions for ourtwo 100% owned French licences could lead to further drilling and inanticipation of this we are already progressing with well permitting andplanning for the 107 bcf Shallow gas prospect on Béarn des Gaves and areextending the Tarbes val d'Adour permit. A number of potential follow-upprospects have been identified across our licences and success with the drillbit could lead to several of these being fast tracked for drilling. In themeantime we continue to look to acquire new licences and projects eitherthrough ground floor licensing rounds or corporate activity. I look forward toproviding updates on our progress. Hugh Mackay, CEO The financial information set out below does not constitute the company'sstatutory accounts for 2014 or 2013. The financial information has beenprepared in accordance with International Financial Reporting Standards (IFRS)as adopted by the European Union on a basis that is consistent with theaccounting policies applied by the group in its audited consolidated financialstatements for the year ended 31 July 2014. Statutory accounts for the yearsended 31 July 2014 and 31 July 2013 have been reported on by the IndependentAuditors. The Independent Auditors' Report on the Annual Report and Financial Statementsfor 2014 and 2013 were unqualified, did not draw attention to any matters byway of emphasis, and did not contain a statement under 498(2) or 498(3) of theCompanies Act 2006. Statutory accounts for the year ended 31 July 2013 have been filed with theRegistrar of Companies. The statutory accounts for the year ended 31 July 2014will be delivered to the Registrar in due course. Consolidated statement of comprehensive income For the year ended 31 July 2014 2013 Note £000 £000 Revenue 3,878 4,503 Other cost of sales (2,301) (2,954) Exploration write-off 1 - (231) Impairment of producing fields 2 (1,203) - Total cost of sales (3,504) (3,185) ---------------------------------- ---------------------------------- Gross profit 374 1,318 Administrative expenses (832) (671) Finance income 20 15 Finance expense (244) (208) ------------------------------------ ------------------------------------ (Loss)/profit before taxation (682) 454 Taxation credit /(charge) 314 (508) ------------------------------------ ------------------------------------ Loss for the year from continuing (368) (54)operations ------------------------------------ ------------------------------------ Discontinued operations Profit/(loss) for the year from 933 (47)discontinued operations ------ ------ Profit/(loss) for the year 565 (101)attributable to the equityshareholders of the parent Other comprehensive (loss)/income Those that may be reclassified toprofit and loss: Recycling of foreign currency (417) -translation reserveon disposal of operations Exchange gain arising on translation - 37of foreign operations ------------------------------------ ------------------------------------ Total comprehensive income/(loss) 148 (64)for the yearattributable to the equityshareholders of the parent ==================================== ==================================== = = Earnings/(Loss) per share (EPS/LPS) attributable to Pence per Pence perthe share shareequity shareholders of the parent Basic and diluted LPS from continuing operations (0.21)p (0.04)p Basic and diluted EPS/ (LPS) from discontinued 0.53p (0.03)poperations Basic and diluted EPS/(LPS) from continuing and 0.32p (0.07)pdiscontinued operations Consolidated statement of financial position As at 31 July 2014 2013 Note £000 £000 Assets Non-current assets Intangible assets 1 3,553 2,446 Property, plant and equipment 2 3,046 4,383 ---------------------------------- ---------------------------------- Total non-current assets 6,599 6,829 ---------------------------------- ---------------------------------- Current assets Inventories 32 33 Trade and other receivables 456 928 Cash and cash equivalents 4,501 672 ---------------------------------- ---------------------------------- 4,989 1,633 ---------------------------------- ---------------------------------- Other current assets - 338 Assets classified as held for sale ---------------------------------- ---------------------------------- Total assets 11,588 8,800 ================================== ================================== Liabilities Current liabilities Trade and other payables (970) (1,227) Current tax liabilities (220) (541) Derivative (35) (48) Short-term borrowings (22) (208) Short-term provisions (4) (290) ------------------------------------ ------------------------------------ Total current liabilities (1,251) (2,314) ------------------------------------ ------------------------------------ Non-current liabilities Long-term borrowings (164) - Deferred tax liabilities (2,371) (2,902) Long-term provisions (1,959) (1,681) --------------- --------------- Total non-current liabilities (4,494) (4,583) --------------- --------------- Total liabilities (5,745) (6,897) --------------- --------------- Net assets 5,843 1,903 ========= ========= Capital and reserves attributableto equity holdersof the parent Share capital 2,049 1,379 Share premium 14,080 13,160 Merger reserve 2,868 2,868 Foreign exchange reserve - 417 Retained deficit (13,154) (15,921) --------------- --------------- Total equity 5,843 1,903 ========= ========= Consolidated statement of changes in equity Attributable to the equity holders of the parent Share Share Merger Foreign Retained Total capital premium reserve Exchange deficit equity reserve £000 £000 £000 £000 £000 £000 Balance at 1 August 1,379 13,160 2,868 380 (15,972) 1,8152012 Loss for the year - - - - (101) (101)attributable to theequityshareholders of theparent Other comprehensive - - - 37 - 37income for the year Share based payment - - - - 152 152 -------------- -------------- -------------- -------------- -------------- -------------- Balance at 31 July 1,379 13,160 2,868 417 (15,921) 1,9032013 ======== ======== ======== ======== ======== ======== £000 £000 £000 £000 £000 £000 Balance at 1 August 1,379 13,160 2,868 417 (15,921) 1,9032013 Issue of share capital 670 920 - - 2,120 3,710 Profit for the year - - - - 565 565attributable to theequityshareholders of theparent Other comprehensive - - - (417) - (417)loss for the year Share based payment - - - - 82 82 -------------- -------------- -------------- -------------- -------------- -------------- Balance at 31 July 2,049 14,080 2,868 - (13,154) 5,8432014 ======== ======== ======== ======== ======== ======== Consolidated statement of cash flows For the year ended 31 July 2014 2013 £000 £000 Cash flows from operatingactivities Loss after tax from continuing (368) (54)operations Adjustments for: Share based payments 82 152 Depreciation 475 578 Exploration write-off - 231 Impairment of property, plant & 1,203 -equipment Finance income (20) (15) Finance expense 244 208 Taxation (credit)/charge (314) 508 Decrease in trade and other 184 621receivables Decrease in inventories 1 23 Decrease in trade and other (60) (535)payables ------ ------ Cash generated from continuing 1,427 1,717operations Profit /(loss) after taxation from 933 (47)discontinued operations Adjustments for: Profit on disposal (1,034) - ------ ------ Cash used in discontinued (101) (47)operations Income tax payment (537) (84) ----- ----- Net cash from operating activities 789 1,586 Cash flows from investingactivities Purchase of property, plant and (3) (5)equipment Purchase of intangible assets (514) (1,020) Receipt of back costs in 300 -connection with farm-in Expenditure on well (363) (51)decommissioning Interest received 6 - ----------------------------------- ----------------------------------- Net cash used in investing (574) (1,076)activities =================================== =================================== == == Cash flows from financingactivities Proceeds from issue of share 3,710 -capital (net of issue costs) Repayment of borrowings (22) (22) Finance costs (25) (34) ----------------------------------- ----------------------------------- Net cash from/(used in) financing 3,663 (56)activities =================================== =================================== Net increase in cash and cash 3,878 454equivalents Exchange loss on cash and cash (49) (12)equivalents Cash and cash equivalents at 672 230beginning of year ----------------------------------- ----------------------------------- Cash and cash equivalents at end 4,501 672of year =================================== =================================== Note 1 - Intangible assets 2014 2013 £000 £000 At 1 August 2,446 2,127 Additions 1,107 550 Exploration write-off - (231) At 31 July 3,553 2,446 Intangible assets comprise the Group's pre-production expenditure on licenceinterests as follows: 2014 2013 £000 £000 France (Béarn des Gaves permit) 1,083 950 Ireland 165 78 UK PEDL143 519 463 UK PEDL180 842 315 UK PEDL181 729 429 UK PEDL182 215 211 -------------------------------- -------------------------------- Total 3,553 2,446 Exploration write-off France (Tarbes val d'Adour - 231permit) - Total - 231 Certain of the UK exploration licences carry well commitments in 2015. If theGroup elects to continue with these licences, it will need to fund the drillingof wells by raising funds or by farming down. If the Group is not able to raisefunds or farm down, or elects not to continue in the licences, then the impacton the financial statements will be the impairment of some or all of theintangible assets disclosed above. Note 2 - Property, plant and equipment Furniture Leasehold Producing Total & building fields computers £000 £000 £000 £000 Cost At 1 August 2012 43 - 10,785 10,828 Additions 2 - - 2 --------------- --------------- ----------------- --------------- At 31 July 2013 45 - 10,785 10,830 Additions 3 - - 3 Transfer from assets - 437 - 437held for resale --------------- --------------- ----------------- --------------- At 31 July 2014 48 437 10,785 11,270 =============== =============== ================= =============== Depreciation, depletionand impairment At 1 August 2012 21 - 5,848 5,869 Charge for year 10 - 568 578 --------------- -------------- ----------------- --------------- At 31 July 2013 31 - 6,416 6,447 Charge for year 9 - 466 475 Impairment in year - - 1,203 1,203 Transfer from assets - 99 - 99held for resale --------------- --------------- ----------------- --------------- At 31 July 2014 40 99 8,085 8,224 =============== =============== ================= =============== Net Book Value At 31 July 2012 22 - 4,937 4,959 =============== =============== ================= =============== At 31 July 2013 14 - 4,369 4,383 =============== =============== ================= =============== At 31 July 2014 8 338 2,700 3,046 =============== =============== ================= =============== The producing fields referred to in the table above are the production assetsof the Group, namely the oilfields at Crosby Warren and West Firsby, and theGroup's interest in the Whisby W4 well, representing three of the Group's cashgenerating units. The carrying value of each producing field was tested for impairment bycomparing the carrying value with the value in use. The value in use wascalculated using a discounted cash flow model using a production decline rateof 7%, Brent crude price of US$110 per barrel, an assumption of no future taxlosses being available and a discount rate of 10%. Cash flows were projectedover the expected life of the fields which is expected to be longer than 5years. There was an impairment of £1,203,000 relating to the West Firsby site but noimpairment at the Crosby Warren site or in respect of the Whisby W4 well (2013:no impairments). The main reason for the impairment of the West Firsby site wasa lower assumed oil production rate. * * ENDS * * For further information please visit www.europaoil.com or contact: Hugh Mackay Europa Oil & Gas (Holdings) plc +44 (0) 20 7224 3770 Phil Greenhalgh Europa Oil & Gas (Holdings) plc +44 (0) 20 7224 3770 Matt Goode finnCap Ltd +44 (0) 20 7600 1658 Henrik Persson finnCap Ltd +44 (0) 20 7600 1658 Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Lottie Brocklehurst St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Notes Europa Oil & Gas (Holdings) plc has a diversified portfolio of multi-stagehydrocarbon assets that includes production, exploration and developmentinterests, in countries that are politically stable, have transparent licensingprocesses, and offer attractive terms. The Company produced 165 boepd in the UKduring the 2013/2014 financial year, generating sufficient revenues to covercorporate overheads and some exploration expenditure. Its highly prospectiveexploration projects include the Wressle (recently drilled and scheduled fortesting) and Kiln Lane prospects (due to be drilled this year) in the UK; 100%owned gas exploration prospect (107 bcf) and appraisal project (CPR 277 bcf) inonshore France; and a joint venture with leading independent Kosmos to exploretwo licences in offshore Ireland in which Europa had previously identified twoprospects with estimated gross mean un-risked indicative resources of 482million barrels oil and 1.6 billion barrels oil respectively. Qualified Person Review This release has been reviewed by Hugh Mackay, Chief Executive of Europa, whois a petroleum geologist with 30 years' experience in petroleum exploration anda member of the Petroleum Exploration Society of Great Britain, AmericanAssociation of Petroleum Geologists and Fellow of the Geological Society. MrMackay has consented to the inclusion of the technical information in thisrelease in the form and context in which it appears.