Europa Oil & Gas Regulatory News (EOG)

13 Feb 2009 07:00

Lilieci-1 Gas Discovery

The Directors of Europa Oil & Gas (Holdings) plc are pleased to announce the initial drill stem test results from the Lilieci-1 well, situated in the EIII-4 Bacau Concession, onshore Romania and operated by Aurelian Oil & Gas srl.

Production logging measurements indicate that total of 10 metres of perforations between 2,412 and 2,584 metres depth flowed dry gas on test at a sustained rate of 4.6 million cubic feet per day (750 barrels of oil equivalent per day) with a wellhead flowing pressure of 165bar. The well will be re-completed for a long-term test in order to better assess appraisal/ development options.

Under the terms of a farmout agreement, Europa's share of the original estimate of the well costs are borne by Aurelian. The well costs, however, exceeded the original estimate and Aurelian further agreed to pay Europa's share of the additional well cost. Under this further agreement, Europa must elect whether or not to participate in the appraisal/development of the Lilieci gas discovery within 60 days of the completion of well operations on Lilieci-1. Such election would trigger a payment in respect of the additional well costs to Aurelian of an estimated £4 million in order for Europa to retain its 19% working interest in the Lilieci discovery.

This success materially upgrades the Bacau Concession, where Europa retains a 19% working interest in the remainder of the Concession regardless of its election with respect to the Lilieci Discovery. The large (1,200km2) Bacau Concession is relatively underexplored, considering its location in the play fairway close to the 850bcf Roman Field.

The Lilieci-1 test result also lends significant weight to the Directors' belief that the Boistea-1 well, in which a similar quality gas-charged reservoir underperformed on test as a result of induced formation damage, is a key candidate for remedial action and subsequent development.

Managing Director, Paul Barrett, said "This test is an excellent result from reservoir intervals interpreted from wireline logs as `borderline pay' before testing. The quality of this test indicates the flow performance to be expected from undamaged formation in the deeper Sarmatian play and points to a need for a re-assessment of historic well data on the Concession."

The technical information and opinions contained in this announcement have been reviewed by Dr. Erika Syba, Europa's Operations Director, who has 25 years of experience in the oil exploration and production industry. She has consented to the inclusion herein of such technical information and opinions.

For further information, please contact;

Paul Barrett Europa Oil & Gas (Holdings) plc 01235 553 266 Jonathan Wright Seymour Pierce 0207 107 8050

www.europaoil.com