Last checked at 18 Apr 2013 07:00
EUROPA OIL & GAS (HOLDINGS) PLC - Kosmos Energy to Farm-in to Europa’s Irish LicencesEUROPA OIL & GAS (HOLDINGS) PLC - Kosmos Energy to Farm-in to Europa’s Irish Licences
PR Newswire
London, April 17
18 April 2013
Europa Oil & Gas (Holdings) plc (`Europa' or `the Company') Kosmos Energy to farm-in to Europa's Irish licences Analyst Conference CallEuropa is pleased to announce a farm-in agreement with a subsidiary of theindependent oil and gas exploration and production company Kosmos Energy Ltd(NYSE:KOS) (`Kosmos') for its two Licencing Options LO 11/7 and LO 11/8 in theSouth Porcupine Basin offshore Ireland (`Licences').
Under the terms of the agreement, Kosmos will:
* acquire an 85% interest and be appointed as operator of both Licences * fully fund the costs of a 3D seismic programme on each Licence * pay 85% of costs incurred by Europa to dateContingent upon an election of the companies to enter into a subsequentexploration drilling phase on one or both of the blocks, Kosmos will also incur100 percent of the costs of the first exploration well on each block. The firstexploration wells on LO 11/7 and LO 11/8 have investment caps of US$90 millionand US$110 million respectively. Costs in excess of the investment cap would beshared between Kosmos (85%) and Europa (15%).
As set out in the Company's technical update announcement dated 16 January 2013in respect of these Licences, Europa commenced the farm-out process with theobjective of finding a partner with the technical and financial resources andthe strategic intent to pioneer a new hydrocarbon play in a deepwater frontierbasin. The transaction with Kosmos represents the successful conclusion of thisprocess.
The completion of the farm-in agreement remains subject to Irish governmentalapproval. Further announcements will be made as and when necessary.
Europa's CEO Hugh Mackay said: "We are very pleased to have secured a respectedleading independent such as Kosmos as a farm-in partner and operator for ourIrish Licences. Kosmos are a highly experienced operator in frontier basins andpioneered the Cretaceous stratigraphic play that has resulted in significantexploration success in the Atlantic margin basins. We look forward to workingwith Kosmos and their involvement is a highly significant first step towardsrealising the potential value of our exciting prospects in a new hydrocarbonplay located in an essentially undrilled basin offshore Ireland.
"The farm-in provides recognition of the substantial potential value lying inour Irish exploration prospects. The work programme associated with the farm-inhas the potential to deliver significant value realisation. Europa's retained15% interest exposes the Company to substantial upside in the event of drillingsuccess at either or both of these prospects at a much reduced risk and cost toour shareholders.
"We understand that the Eirik Raude rig is in Irish waters to drill Exxon'sDunquin well. An exciting new chapter in the exploration of Ireland is startingand we are delighted to be part of it."
About LO 11/7 and LO 11/8, offshore Ireland
LO 11/7 and LO 11/8 each cover an area of approximately 1,000km2 in the highlyprospective South Porcupine basin, offshore Ireland. The Licences have beenmapped using existing 2D seismic data and are undrilled. Europa's technicalwork to date has identified two, previously unknown, prospects in the LowerCretaceous stratigraphic play: Mullen in LO 11/7 and Kiernan in LO 11/8.Information about the Mullen and Kiernan prospects were provided to the marketsin previous RNS releases dated 6 November 2012 and 16 January 2013respectively.
Further information in respect of LO 11/7 and LO 11/8, as well as the farm-inby Kosmos, will be posted on Europa's website at www.europaoil.com.
Analyst Conference Call
Europa is pleased to announce that it will be holding a conference call foranalysts on Monday 22 April 2013 at 11.00 BST. Please email info@sbmf.co.uk ifyou wish to join the call.
Europa CEO Hugh Mackay will be hosting the call and will provide an update onthe Company's operations in Ireland.
**ENDS**For further information please visit www.europaoil.com or contact:
Hugh Mackay Europa + 44 (0) 20 7224 3770 Phil Greenhalgh Europa + 44 (0) 20 7224 3770 Matt Goode finnCap Ltd +44 (0) 20 7220 0500 Henrik Persson finnCap Ltd +44 (0) 20 7220 0500 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 NotesEuropa 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 later this year; a100% owned deep gas appraisal project with a CPR assigned contingent resourceof 277bcf in onshore France; and a joint venture with leading independentKosmos to explore two licences in offshore Ireland in which Europa hasidentified two prospects with estimated gross mean unrisked indicativeresources of 482 million barrels oil and 1.6 billion barrels oil respectively.