Europa Oil & Gas Regulatory News (EOG)

1 Mar 2011 09:00

Europa Oil & Gas (Holdings) plc

1 March 2011Operations and Project UpdateWest Firsby, UK

Drilling of new production well WF-9 was completed on 17th February 2011. Since completing WF-9, the HH102 rig has moved over the WF-3 well to re-perforate this well for use as a water injector. These operations, in close proximity to the WF-9 wellhead, have prevented the surface beam pump from being commissioned until WF-3 operations are complete. Perforating has now taken place on WF-3 and the rig will move away over the coming days to allow full access to the WF-9 wellhead to complete the beam pump installation. The well will test the flow rates from Zone 1 and Zone 2 individually, initially producing from Zone 2 before moving on to Zone 1. Currently, associated gas from Zone 2 is building up in the shut-in well, an encouraging indication.

With regard to the existing producers in the field, a change in the WF-7 bottom hole assembly (BHA) is required and a plan has been submitted to the HSE to undertake a workover to replace the BHA to bring the well back up to full production capacity. This work will take place around mid-March.

Overall, production since early December has been low, due to a combination of weather-related and operational issues. This has brought the average production for the 6 months to 31 January 2011 down to 151bopd. It is anticipated that, with WF-9 coming onstream and the forthcoming WF-7 repairs, production will soon be back on-track.

Berenx, France

The technical work has indicated that there is ample evidence on the reprocessed 3D seismic data for the development of faulted structures developed all along the front of the Berenx fault-block system to the east of the existing wells. Data appertaining to a short interval drill stem test in the Berenx-2 well conducted in 1974 has recently been obtained from legacy archives and these data demonstrate that the well produced dry gas to surface but did not adequately test the fracture system in the reservoir.

Maintaining open fractures in the wellbore is critical for a successful test and can be achieved principally by two methods: managed pressure drilling and non-cemented completion techniques. In order to properly plan this challenging well, the Directors are currently in the final stages of selecting the drilling engineering team from a short-list to plan and manage the Berenx-3 well.

Planning for the deep HPHT Berenx-3 well will take over 12 months, with long lead items with specialist steel fabrication needing to be committed to in mid-2011. There is a strong technical case for acquiring additional 3D seismic coverage over the western part of the Berenx structure prior to drilling and we are currently looking at the possibility of 3D seismic acquisition during the well planning period.

Barchiz, Romania

The JV partners have reviewed the results of the Barchiz-1 well. The partners are discussing the forward programme for both Barchiz and the block as a whole. The option favoured by Europa is to penetrate a thicker section of the oil-bearing Oligocene sandstone and to test the main prospect target, which remains untested by the original wellbore. The course of action will be determined following a technical meeting on the 25th of March and the Company will provide an update on the Barchiz forward programme soon after this meeting.

Paul Barrett, Managing Director, said `We are aware that shareholders, like ourselves, are anxious to quantify the fruits of our labours at West Firsby, especially considering the current oil price. We expect the WF-9 well to perform in line with expectations and we will inform shareholders as soon as we know the results.

With regard to Berenx and Barchiz, we have made significant progress in understanding both the challenges and potential of both of these projects and again, will be looking to update the market as developments progress.'

Further information:

Europa Oil & Gas

Paul Barrett / Phil Greenhalgh Tel: +44 1235 553 266

finnCap

Sarah Wharry / Henrik Persson, Corporate Finance Tel: +44 207 220 0567 Joanna Weaving, Corporate Broking Tel: +44 207 600 1658