Europa Oil & Gas Regulatory News (EOG)

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas 11 October 2013 Europa Oil & Gas (Holdings) plc (`Europa' or `the Company') Final Results for the year to 31 July 2013 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 2013. 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 paper copy in early November. Operational highlights * Farm-in secured with Kosmos Energy Ireland (`Kosmos') for two blocks offshore Ireland * Converted two Irish Licence Options to Frontier Exploration Licences (`FEL') * Commenced 3D seismic acquisition programme offshore Ireland * Identified large shallow gas prospects on Béarn des Gaves permit onshore France * Wrote down the Tarbes val d'Adour intangible asset onshore France * Acquired 77 km of 2D seismic and identified four new conventional hydrocarbon leads in North East Lincolnshire (PEDL181) * Favourable judgment at High Court for UK Holmwood planning appeal * 182 boepd recovered from three UK onshore fields - ahead of forecast Financial performance * Group revenue £4.5 million (2012: £5.1 million) * Pre tax profit £0.4 million (2012: loss £12.1 million) * Pre tax profit excluding exploration write-off and impairment £0.6 million (2012: £1.2 million) * Cash generated from operations £1.6 million (2012: £2.1 million) * Net cash balances as at 31 July 2013 £0.7 million (31 July 2012: £0.2 million) Post reporting date events * Renewed Béarn des Gaves permit until 23 March 2017 * Received £0.3 million from Kosmos in respect of costs on the two Irish licence options * 3D seismic acquisition in Ireland on-going, FEL 3/13 is completed * Two new subsidiary companies established for Irish licence interests * Leith Hill Action Group announced its intention to appeal against Europa's successful High Court challenge regarding the Holmwood prospect * Underground Coal Gasification licences allowed to lapse Europa's CEO, Hugh Mackay said, "Significant milestones have been met at two ofour most highly prospective projects, each of which has company-makingpotential. In Ireland, not only did Kosmos agree to farm-in to our two offshorelicences, but has effectively brought forward the 3D seismic acquisitionprogramme by a year to July 2013. This demonstrates both their ambition andresources and ensures the momentum generated will continue into the winter, asthe new data is processed and interpreted. Meanwhile in France, theidentification of a large shallow gas prospect at Béarn des Gaves with meanun-risked resources of 416 bcf and the recent renewal of the permit, allows usto press ahead with well permitting and to reopen the data room for potentialfarm-in partners. "In the UK, the final quarter of the year will see us participate in thedrilling of the Wressle prospect which we rate as having a 1 in 3 chance ofmaterially adding to our existing production. While on the nearby licencePEDL181, we will be completing technical work on both newly acquired andexisting seismic data, and delivering drillable prospects. We are alsoevaluating a number of new ventures where we can apply our expertise and addvalue. This is an exciting period for Europa and in particular I look forwardto providing updates as we advance our two company-making projects in Irelandand France." Chairman's statement At our Annual General Meeting in December 2012 we stated our objective tobecome an upper quartile exploration and production company on AIM by 2017. Iam pleased to report that we have taken a very significant step towardsachieving that objective with our farm-out in Ireland. Our Irish licences contain prospects that may hold very large volumes of oil.Exploration success at these prospects would be utterly transformational forEuropa. In April 2013 we were delighted to announce a farm-in agreement withKosmos Energy Ltd (`Kosmos'), a leading independent oil and gas exploration andproduction company. They have immediately moved us into an acceleratedexploration programme. Kosmos pioneered the Cretaceous stratigraphic play thathas resulted in significant exploration success in the Atlantic margin basins.With such a pedigree, we view Kosmos' participation in our Irish blocks as avote of confidence in the technical work we carried out. Today, Europa has a15% free carry on potentially two high impact wells operated by a leadingfrontier explorer in an emerging hydrocarbon hotspot. We have now moved fromtalk to action. Should the state of the art 3D seismic we acquired this summerconfirm the prospectivity then by the summer of 2014 we could be committing todrill a playmaker exploration well in 2015. This is fast track deepwaterfrontier exploration and we are already a year ahead of the competition. New technical work in the Béarn des Gaves permit in the Aquitaine Basin,onshore France has substantially upgraded the gas resources at the Berenxshallow prospect to more than 400 bcf. Exploration success would be a companymaker. Having only just received notification of the renewal of the permit wehave initiated drilling planning and will immediately look to restart thefarm-out process with a view to drilling a shallow well within the next 18months. Europa will continue to pursue new ground floor exploration ventures withminimal entry costs. The technical insights that we are acquiring in Irelandprovide us with a competitive edge that we will seek to exploit throughparticipation in the next Irish Atlantic margin licensing round. We are alsoinvestigating other ground floor exploration opportunities in the NorthAtlantic and Mediterranean as well as further afield. We continue to work up our onshore UK portfolio. The Wressle well in PEDL180will be spudded towards the end of the year. We acquired new seismic in PEDL181and are working up new prospects that may become candidates for drilling nextyear. We continue to seek planning approval for the Holmwood well in PEDL143. In parallel with this exploration activity we are seeking opportunities toacquire production either from actively producing fields or more brownfieldactivity. We are also reviewing consolidation opportunities. The Europa team isactively in the deal flow and announcements will be made as and whensignificant events occur. Europa is not just an oil and gas explorer but also a producer. For the secondconsecutive year, our production from three UK onshore fields has hit ourforecast. This year we produced 182 boepd which generated revenues of £4.5million over the period, a lower figure than the previous year's average of 200boepd due to the anticipated natural decline in production. We have completedan integrated reservoir and production engineering study that will provide thetechnical basis for the future management of the West Firsby field. Aftertaking into account the cost of two work-overs on the West Firsby well in H12013 and costs associated with reservoir studies undertaken in H2 2013, profitbefore tax (before exploration write-offs) for the year was £0.6 million (2012:£1.2 million). Costs were higher over the period, predominantly as a result ofadditional spend on the work-overs, and exaggerated by administrative costs inthe prior period having benefitted from a credit from the disposal of theUkraine business. Cash as at 31 July 2013 stood at £0.7 million (2012: £0.2 million). With anadditional £0.3 million received from Kosmos in August 2013 in respect of Irishback costs, we can fully fund our share of drilling the Wressle prospect onPEDL180 later this year. Largely as a result of the progress made during the 12 months under review, theyear ahead promises to be a highly active period for Europa including drillingWressle, completing 3D seismic acquisition offshore Ireland with subsequentprocessing, interpretation and prospect generation; generating drillableprospects in PEDL181. In addition, following the recent renewal of the Béarndes Gaves permit, we intend to commence the permitting process required todrill a well in the 416 bcf Berenx shallow prospect, in conjunction withreopening a data room for potential partners. Following the favourable HighCourt judgment in July 2013 regarding our application to drill a temporaryexploration well on the Holmwood prospect in the Weald Basin, we are hopefulthat we will eventually be in a position to drill what we believe to be one ofthe best undrilled prospects onshore UK. Outside our existing portfolio, having proved our low cost exploration modelgenerates value, we are actively looking to acquire new licences around theworld which match our criteria and where we can replicate the success weachieved offshore Ireland. We are working hard to close the gap which hasopened up between our current share price and the value of our risked anddiluted net resources and production. With a team in place that has alreadyachieved much success, as evidenced by Kosmos' decision to farm-in to our Irishlicences, I believe we are well placed to become an upper quartile oil and gascompany on AIM and in the process generate significant value for shareholders. Finally, I would like to thank the management team, directors and advisers fortheir hard work during the year and also to our shareholders for theircontinued support over the period. WH AdamsonChairman Operational review Europa operates exploration, production and appraisal assets across three coreEU countries. Ireland - Exploration - Porcupine Basin Frontier Exploration Licences (`FELs')2/13 and 3/13- Europa (15%); Kosmos (85% and operator) In November 2011 Europa was awarded two Licence Options (`LO') in the SouthPorcupine Basin offshore southwest Ireland; LO 11/7 and LO 11/8. The SouthPorcupine Basin is underexplored and had been overlooked by the mainstream oiland gas industry. The exploration model for the licences involves a new play,the Cretaceous stratigraphic play: comprising Early Cretaceous turbiditesandstone reservoirs; charged by mature Late Jurassic and Early Cretaceoussource rocks and contained in stratigraphic traps with elements of structuralclosure. The Cretaceous play in Ireland is considered to be analogous to theCretaceous play in the equatorial Atlantic Margin province that has deliveredthe Jubilee and Mahogany oil fields. Previous drilling offshore West Irelandduring the 1970s and 1980s focused on a North Sea style Jurassic play andfailed to find commercial hydrocarbons. We believe that the new Cretaceousplay, enabled by modern 3D seismic and deepwater drilling technology, has thepotential to deliver commercial hydrocarbon discoveries. Europa's interpretation of pre-existing 2D seismic identified two previouslyunknown prospects in the Lower Cretaceous stratigraphic play: Mullen in LO 11/7and Kiernan in LO 11/8. The Company estimates these to have gross meanun-risked indicative resources of 482 million barrels of oil and 1.612 billionbarrels of oil equivalent respectively. Information about the Mullen andKiernan prospects were provided to the markets in press releases dated 6November 2012 and 16 January 2013. Europa launched its farm-out of both Licence Options in November 2012 andopened a data room to prospective farminees in January 2013. There wassignificant interest from large and mid-cap oil companies and on 18 April 2013Europa announced it had successfully farmed out both LO 11/7 and LO 11/8 toKosmos. Kosmos agreed to farm-in to each Licence Option, earning an 85% interest in,and operatorship of, each licence. The transfer of interest and operatorshipwas approved by the Irish Government on 8 May 2013 and Kosmos, as operator,undertook to accelerate the conversion of LOs 11/07 and 11/08 into FrontierExploration Licences (`FELs'). FELs were granted by the Irish Governmentcommencing on 5 July 2013. Following the mandatory 25% relinquishment, LO 11/7became FEL 2/13 and LO 11/8 became FEL 3/13. Each FEL lasts for a period of 15years and is broken down into a maximum of four phases. The first phase ofthree years includes a commitment to acquire 740 km2 of 3D seismic on eachlicence. The second phase lasts four years and has a commitment to drill anexploration well on each licence. Under the terms of the farm-in Kosmos will fully fund the costs of a 3D seismicprogramme in the first phase of each FEL. Contingent upon an election of thecompanies to enter into the second phase of the FEL, which carries a drillingcommitment, Kosmos will incur 100% of the costs of the first exploration wellon each FEL. The first exploration wells on FEL 2/13 and FEL 3/13 haveinvestment caps of US$90 million and US$110 million respectively. Costs inexcess of the investment cap would be shared between Kosmos (85%) and Europa(15%). In parallel with the FEL application process Kosmos secured a seismic vesseland obtained the appropriate permits from the relevant departments of the IrishGovernment to enable 3D seismic acquisition during the summer 2013 season. TheMV Polarcus Amani started acquisition on 5 July 2013. The early conversion toan FEL in July 2013 means that seismic has been obtained a year earlier thanwould have been had we followed the conventional timetable and converted inNovember. FEL 3/13 has been completed and the first phase work commitment onthis licence is already fulfilled. Seismic acquisition is on-going over FEL 2/13. The 3D seismic being acquired over the licences is a very significant firststep towards realising the hydrocarbon potential of the basin. Based on thehistoric 2D seismic, Europa estimates geological risk to be around 1 in 10 forboth the Kiernan and Mullen prospects. 3D has the potential to substantiallyde-risk these prospects. Particularly if features like conformance, flat eventsand AVO anomalies are observed on the 3D seismic data. It is anticipated thatthe indicative resources previously provided to the market will changeaccording to the vastly improved prospect mapping arising from the state of theart 3D data currently being acquired. The prospect sizes will likely remainlarge and the quantum of resources is likely to be hundreds of millions ofbarrels. In July 2013 ExxonMobil completed drilling the Dunquin exploration well inlicence FEL 3/04 which lies in the South Porcupine basin between FEL 2/13 and 3/13. The well targeted a very different hydrocarbon play comprising carbonatereef reservoir on a volcanic ridge in the middle of the basin and proved to bewater bearing with no commercially recoverable hydrocarbons. This result isirrelevant to the Cretaceous turbidite sandstone stratigraphic play beingpursued in FEL 2/13 and 3/13 since we are pursuing a completely differentreservoir and trap on the flanks of the basin. Of more relevance is the reportthat oil shows were present in sidewall cores over the upper 44m section of theDunquin reservoir, suggesting the presence of a possible residual oil column.If correct this indicates that an oil prone source rock is present in the basinand may de-risk the source rock component of the Cretaceous stratigraphic play. The pioneering work in the Porcupine basin by the participants in the 2011Atlantic Margin Licensing Round has been endorsed by the entry of mid-cap andlarge oil companies during the first half of 2013. At the same time as farminginto Europa's licences Kosmos also farmed into Antrim's licence FEL 1/13. On 7May 2013 Cairn Energy announced a farm-in to Chrysaor operated FELs 2/04 and 4/08 and LO 11/2. On 28 June 2013 Woodside Petroleum announced a farm-in toPetrel's LO 11/4 and 11/6 and Bluestack's LO 11/3. The earliest feasible drill date in our licences is 2015. The operator Kosmoshas a new build, 6th generation, ultra-deepwater drillship, Atwood Achieverscheduled for delivery in mid 2014 for a three year contract. With a maximumwater depth capability of 3,650m the drillship can work in the 1,000-2,000mwater depths in our licences. Further announcements will be made in due courseand following prospect mapping with the new seismic in H1 2014. We are excited by the potential of a new play in an underexplored andoverlooked basin. We are at the forefront of exploration of this play. Thetechnical insights that Europa has, and will gain, from its work in the SouthPorcupine Basin provides a competitive edge that we will seek to exploitthrough participation in future licensing rounds in Ireland. 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 appraisal project having previously been explored and drilledby EssoRep with two wells, Berenx-1 (1969) and Berenx-2 (1972), bothencountering strong gas shows over a 500m thick gas bearing zone. In 1975Berenx-2 was re-entered, drill stem tested and flowed gas to surface from thesame carbonate reservoir that delivered 9 tcf and 2 tcf from nearby fields atLacq and Meillon. Europa possesses all data connected to both wells. Good quality 2D seismic dataexists for the licence as well as a reprocessed 3D seismic dataset covering thearea between Berenx and Lacq. Europa's in-house technical work indicates thatthe Berenx deep appraisal prospect could hold in excess of 500 bcf ofrecoverable gas resources. In a CPR dated 31 May 2012, ERC Equipoise estimatedgross mean un-risked resources of 277 bcf for the Berenx deep gas play. Thedifference between Europa's and ERC's assessment of resources reflects theconfidence of each party in mapping in a geologically complex terrain. Europawas able to map a larger area of closure and as a consequence larger resources. Thorough re-evaluation and interpretation of existing seismic and well data onthe permit has resulted in the better definition of a shallow gas prospect,Berenx Shallow. Previous exploration on the concession had focused only on thedeep lying gas prospectivity. A comprehensive review of historic well results,re-interpretation of structure and better understanding of proven hydrocarbonbearing reservoir distribution in the shallow Cretaceous and Late Jurassiccarbonate sediments by Europa has upgraded the Berenx Shallow gas prospectivityand suggests potential gross mean un-risked resources of 416 bcf. Gross un-risked resources bcf Reservoir P90 P50 P10 mean Neocomian 126 240 402 254 Kimmeridgian 66 156 261 162 Total 416 The Company's strategy for Béarn des Gaves is to first target the shallow gasplay, drill a well to deliver a commercial flow rate and, on the back ofsuccess, to further appraise shallow prospectivity and undertake work tode-risk the Berenx Deep appraisal project. The anticipated total depth of theBerenx Shallow well is approximately 2,500m. Europa submitted its application for the renewal of Béarn des Gaves in November2011 and the renewal process formally started on 22 March 2012. Post-period endon 3 October 2013, the Company was informed by the French authorities that thepermit has been successfully renewed. This next phase covers a period of fiveyears from 22 March 2012 and carries an expenditure commitment of approximately€2.5 million. The Directors intend to immediately commence a farm-out processfor the permit in tandem with well planning and permitting for a well locationon Berenx Shallow ahead of drilling in the next 18 months. The permit benefits from being located only 20 km from the Lacq Field, whichpotentially provides a straightforward export route, allowing gas to beprocessed in an existing facility with spare capacity. France - Tarbes val d'Adour 100% As announced in July, the Tarbes Val d'Adour permit has not yet been renewed bythe French authorities. Under the terms of the agreement, if notification ofrenewal has not been received by the expiry date then the permits are deemed tohave lapsed. Europa has submitted an appeal to the relevant French authorities. Furtherupdates with respect to the appeal process will be provided by the Company asand when it is appropriate to do so. Total aggregate exploration costs of £0.2million previously incurred on the permit by Europa has been written off in thecurrent financial period. UK - NE Lincolnshire - PEDL180 33.3% (Wressle) PEDL180 covers an area of 100 km2 of the East Midlands Petroleum Province southof the Crosby Warren field. Europa has a 33.3% working interest in the blockwith its partners Egdon Resources (operator, 25%), Celtique Energie PetroleumLtd (33.3%) and Union Jack Oil (8.3%). 49 km2 of 3D seismic acquisitioncovering PEDL180 and PEDL182 was acquired in Q1 2012 and has been processed andinterpreted. The operator estimates the Wressle prospect to hold mean grossun-risked recoverable resources of 2.1 mmbo. Drilling at Wressle is planned totake place towards the end of 2013. UK - NE Lincolnshire - PEDL182 33.3% (Broughton) To the north, PEDL182 is an area of 40 km2 with the same equity structure asthat of PEDL180. The Broughton prospect was previously drilled by BP and flowedoil. The May 2012 Competent Person's Report (`CPR') estimated the Broughtonprospect to hold mean gross un-risked recoverable resources of 1.85 mmbo. UK - NE Lincolnshire - PEDL181 50% 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 forconventional oil and gas and unusually for this play has never been previouslydrilled. The licence is located in a working hydrocarbon system where a numberof discoveries have been made along the Brigg-Broughton anticline, an analogoustrend to the west of Caistor anticline. Europa's existing oil production at theCrosby Warren field lies at the westernmost end of the anticline. Technicalevaluation has confirmed several conventional prospects/leads on PEDL181. Fourof these in the southern part of the licence, all with reservoirs ofCarboniferous age, were the focus of a 78 km 2D seismic acquisition programmethat was completed in April 2013. Reprocessing of 150 km2 of existing 3Dseismic data has been performed together with processing of the new data.Interpretation of the integrated dataset is being performed with the objectiveof maturing the four leads and defining drillable prospects. This work is dueto be completed later this year, at which point the results will be releasedalong with a forward plan for the licence. In addition to the conventional prospectivity the licence may also containshale gas potential in the South Humber basin. Interpretation of the newseismic data suggests that this basin may contain a much thicker sequence ofNamurian age sediments than was previously thought. To date this sedimentarypackage has not been drilled in the South Humber basin. The Namurian section inthe Gainsborough Trough basin, located some 25 km to the west of PEDL181 hasbeen drilled and is known to host the Bowland Shale which has well documentedpotential for shale gas. It is possible that the Namurian section in the SouthHumber basin may contain a Bowland Shale equivalent with similar potential forshale gas. 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 Jurassic sandstone project with a low geologicalrisk. The May 2012 CPR estimated Holmwood to hold gross mean recoverableresources of 5.64 mmbo. Europa considers Holmwood to be one of the bestundrilled exploration prospects in the UK onshore. The prospect lies south of Dorking within the Surrey Hills Area of OutstandingNatural Beauty and an application to construct a temporary exploration well onthe site 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. As announced on 1 November 2012, Europa, along with its partners, applied foran order to quash the decision of the Secretary of State for Communities andLocal Government's appointed Inspector to dismiss the appeal. On 25 July 2013in the Royal Courts of Justice the judge, Mr Justice Ouseley, gave judgment infavour of quashing the Inspector's decision. The judge also granted the LeithHill Action Group (`LHAG') leave to appeal to the Court of Appeal against hisjudgment. On 19 September 2013, LHAG submitted an appeal to the Court ofAppeal. The hearing is expected to be of one day duration and to take placebetween February and May 2014. If the Court rules in favour of Europa, theappeal will be remitted to the Planning Inspectorate for redetermination, whichmay involve a further planning inquiry, for the exploratory drill site atHolmwood. UK - Production (West Firsby 100%; Crosby Warren 100%; Whisby W4 well 65%) The three UK fields produced 182 boepd in line with management expectations.During the period, workovers were successfully completed on the West Firsbywells which are now back on production. Detailed production and reservoirengineering studies have been conducted and the results implemented with theaim of maximising recovery rates at the producing fields. Proven and probable (`2P') producing reserves of the three producing fields wasestimated at 0.65 mmbo by the CPR (as at 31 December 2011). UK - Unconventional resources - Underground Coal Gasification (UCG) 90% Europa (90%) and Oxford Energy Consulting Limited (10%) acquired two UCGlicences on the 22 September 2010 from the Coal Authority, using powersconferred on it by the Coal Industry Act 1994; one being the HoldernessOffshore Area (CA11/UCG/0015/S) and the other the South Humber Offshore Area(CA11/UCG/0016/S). Following a technical evaluation, Europa concluded there is at present nocommercial means of exploiting the coal using UCG at the depth at which thecoal occurs and taking into account thickness of the individual coal seams. Asa result, these licences were allowed to lapse on the 22 September 2013. UK - Unconventional resources - Shale Gas As previously noted PEDL181 has some potential for shale gas. Romania The Company continues to hold interests in two exploration licences in Romania:Brates (100%) and Bacau (19%). Both licences are in the process of beingrelinquished. The assets were fully written down in the year ended 31 July2012. Conclusion Thanks to the success of the in-house technical work undertaken over the courseof the year we have two potential company makers in our portfolio offshoreIreland and onshore France. Ireland is funded and we have begun an explorationprogramme that could lead to realisation of this potential by drilling in 2015. Plenty of work remains to be done on our existing projects and on new venturesin the year ahead. We are delighted with the pace that Kosmos has set inadvancing the Irish licences since taking over operatorship. By acquiring 3Dseismic in summer 2013, the partnership has gained a year and we can focus onprocessing and interpreting the seismic during the winter months to furtherdefine the prospectivity and identify possible drilling targets. Having securedthe renewal of Béarn des Gaves, we will target securing a farm-in partner witha view to drilling a well at Berenx Shallow in the next 18 months. In the UK,we are close to identifying drillable prospects on PEDL181 while on PEDL180 weexpect to drill Wressle towards the end of 2013. I am excited about the yearahead and look forward to making further significant progress on all ourprojects and particularly our two company makers. Hugh Mackay CEO The financial information set out below does not constitute the company'sstatutory accounts for 2013 or 2012. 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 2012. Statutory accounts for the yearsended 31 July 2013 and 31 July 2012 have been reported on by the IndependentAuditors. The Independent Auditors' Report on the Annual Report and Financial Statementsfor 2013 was unqualified, did not draw attention to any matters by way ofemphasis, and did not contain a statement under 498(2) or 498(3) of theCompanies Act 2006. The Independent Auditors' Report on the Annual Report and Financial Statementsfor 2012 was unqualified, did not contain a statement under 498(2) or 498(3) ofthe Companies Act 2006 but drew attention by way of emphasis to mattersconcerning the renewal of the French exploration permits. Statutory accounts for the year ended 31 July 2012 have been filed with theRegistrar of Companies. The statutory accounts for the year ended 31 July 2013will be delivered to the Registrar in due course. Consolidated statement of comprehensive income For the year ended 31 July 2013 2012 Note £000 £000 Revenue 4,503 5,080 Other cost of sales (2,954) (2,692) Exploration write-off 1 (231) (12,451) Impairment of producing fields - (785) Total cost of sales (3,185) (15,928) --------- --------- Gross profit/ (loss) 1,318 (10,848) Administrative expenses (718) (755) Finance income 15 - Finance expense (208) (452) --------- --------- Profit/(loss) before taxation 407 (12,055) Taxation (charge)/credit (508) 739 --------- --------- Loss for the year attributable to the equity (101) (11,316)shareholders of the parent --------- --------- Other comprehensive income / (loss) Those that may be reclassified to profit and loss Exchange gain / (loss) arising on translation of 37 (36)foreign operations --------- --------- Total comprehensive loss for the year attributable (64) (11,352)to the equity shareholders of the parent ========= ========= Loss per share (LPS) attributable to the Pence per share Pence per shareequity shareholders of the parent Basic and diluted LPS (0.07)p (8.33)p Consolidated statement of financial position As at 31 July 2013 2012 Note £000 £000 Assets Non-current assets Intangible assets 1 2,446 2,127 Property, plant and equipment 4,383 4,959 Deferred tax asset - 14 --------- --------- Total non-current assets 6,829 7,100 --------- --------- Current assets Inventories 33 56 Trade and other receivables 928 1,250 Cash and cash equivalents 672 230 --------- --------- 1,633 1,536 --------- --------- Other current assets 338 338 Assets classified as held for sale --------- --------- Total assets 8,800 8,974 ========= ========= Liabilities Current liabilities Trade and other payables (1,227) (1,880) Current tax liabilities (541) (87) Derivative (48) (64) Short-term borrowings (208) (230) Short-term provisions (290) - --------- --------- Total current liabilities (2,314) (2,261) --------- --------- Non-current liabilities Deferred tax liabilities (2,902) (2,948) Long-term provisions (1,681) (1,950) --------- --------- Total non-current liabilities (4,583) (4,898) --------- --------- Total liabilities (6,897) (7,159) --------- --------- Net assets 1,903 1,815 ========= ========= Capital and reserves attributable to equityholders of the parent Share capital 1,379 1,379 Share premium 13,160 13,160 Merger reserve 2,868 2,868 Foreign exchange reserve 417 380 Retained deficit (15,921) (15,972) --------- --------- Total equity 1,903 1,815 ========= ========= Consolidated statement of changes in equity Attributable to the equity holders of the parent Foreign Share Share Merger exchange Retained Total capital premium reserve reserve deficit equity £000 £000 £000 £000 £000 £000 Balance at 1 August 1,301 12,573 2,868 416 (4,719) 12,4392011 Total comprehensive - - - (36) (11,316) (11,352)loss for the year Share based payment - - - - 63 63 Issue of share 78 587 - - - 665capital (net ofissue costs) --------- --------- --------- --------- --------- --------- Balance at 31 July 1,379 13,160 2,868 380 (15,972) 1,8152012 ========= ========= ========= ========= ========= ========= £000 £000 £000 £000 £000 £000 Balance at 1 August 1,379 13,160 2,868 380 (15,972) 1,8152012 Total comprehensive - - - 37 (101) (64)loss for the year Share based payment - - - - 152 152 --------- --------- --------- --------- --------- --------- Balance at 31 July 1,379 13,160 2,868 417 (15,921) 1,9032013 ========= ========= ========= ========= ========= ========= Consolidated statement of cash flows For the year ended 31 July 2013 2012 £000 £000 Cash flows from operating activities Loss after tax (101) (11,316) Adjustments for: Share based payments 152 63 Depreciation 578 673 Exploration write-off 231 12,451 Impairment of property, plant & equipment - 785 Finance income (15) - Finance expense 208 452 Taxation expense /(credit) 508 (739) Decrease/ (Increase) in trade and other 621 (647)receivables Decrease/ (Increase) in inventories 23 (13) (Decrease) / Increase in trade and other payables (535) 350 --------- --------- Cash generated from operations 1,670 2,059 Income tax payment (84) - --------- --------- Net cash from operating activities 1,586 2,059 ========= ========= Cash flows from investing activities Purchase of property, plant and equipment (5) (78) Purchase of intangible assets (1,020) (2,955) Expenditure on well decommissioning (51) - --------- --------- Net cash used in investing activities (1,076) (3,033) ========= ========= Cash flows from financing activities Proceeds from issue of share capital (net of issue - 665costs) Decrease in payables related to the issue of share - (115)capital Repayment of borrowings (22) (1,025) Finance costs (34) (289) --------- --------- Net cash used in financing activities (56) (764) ========= ========= Net increase / (decrease) in cash and cash 454 (1,738)equivalents Exchange (loss) /gain on cash and cash equivalents (12) 92 Cash and cash equivalents at beginning of year 230 1,876 --------- --------- Cash and cash equivalents at end of year 672 230 ========= ========= Note 1 - Intangible assets Intangible assets - Group 2013 2012 £000 £000 At 1 August 2,127 11,348 Additions 550 3,230 Exploration write-off (231) (12,451) --------- --------- At 31 July 2,446 2,127 ========= ========= Intangible assets comprise the Group's pre-production expenditure on licenceinterests as follows: 2013 2012 £000 £000 France (Béarn des Gaves permit) 950 1,039 Ireland 78 66 UK PEDL143 (Holmwood) 463 437 UK PEDL180 (Wressle) 315 279 UK PEDL181 (Caistor) 429 113 UK PEDL182 (Broughton) 211 193 --------- --------- Total 2,446 2,127 ========= ========= 2013 2012 £000 £000 Exploration write-off France (Tarbes val d'Adour permit) 231 - UK PEDL150 (Hykeham) - 2,057 Romania - 10,394 --------- --------- Total 231 12,451 ========= ========= The Tarbes Val d'Adour permit was not renewed by the French authorities withinthe set timeframe of the renewal process. Under the terms of the agreement, ifnotification of renewal has not been received by the expiry date then thepermit is deemed to have lapsed. While Europa has appealed against thisoutcome, with this uncertainty, the intangible asset has been written off inthe period. Certain of the UK exploration licences carry well commitments in 2014. If theGroup elects to continue with these licences, it will need to fund the drillingof wells by raising finance or by farming down. If the Group is not able toraise funding, or elects not to continue in the licences, then the impact onthe financial statements will be the impairment of some or all of theintangible assets disclosed above. Note 2 - Going Concern In their assessment of going concern the directors note that the Group isdependent on the existing bank facility in place. The current bank facility isdue to expire in January 2014. Based on correspondence with the Group's bankersthe directors have no reason to believe that the facility will not be renewedon the same or similar acceptable terms in an appropriate timescale. Thereforegiven this expectation and the continuing cash inflow from the Group'sproducing assets the directors have concluded, at the time of approving thefinancial statements, that there is a reasonable expectation, based on theGroup's cash flow forecasts, that the Group can continue in operationalexistence for the foreseeable future, which is deemed to be at least 12 monthsfrom the date of signing these financial statements. Accordingly they continueto adopt the going concern basis in preparing the financial statements. * * 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 currently producesapproximately 180 boepd in the UK, generating sufficient revenues to covercorporate overheads. Its highly prospective exploration projects include theWressle prospect in the UK where a well is due to be drilled towards the end of2013; and a joint venture with leading independent Kosmos Energy to explore twolicences in offshore Ireland in which Europa has identified two prospects withestimated gross mean un-risked indicative resources of 482 million barrels oiland 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.