Europa Oil & Gas Holdings PLC (LON:EOG) has expanded its footprint offshore Ireland with the acquisition of a 100% interest in an area in the vicinity of the Corrib gas field and its own Inishkea exploration prospects.
The company is acquiring Frontier Exploration Licence (FEL) 3/19 from Oslo-headquartered DNO with only a nominal upfront cash consideration, it is also giving the seller a 5% net profits interest royalty over any future gas or liquids production.
FEL 3/19 is host to the 1.2 trillion cubic feet (tcf) Edge prospect, and, along with Inishkea which is estimated at 1.5 tcf, represents a strategic focus for Europa as it increasingly prioritises the gas portion of its hydrocarbon exploration portfolio offshore Ireland.
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Gas potentially offers a shorter, lower risk and potentially cheaper route to commercial success in Ireland. Significantly, due to the proximity of Corrib - which provides the majority of Ireland’s domestic gas production - the emphasis on Inishkea and now Edge is described as being ‘infrastructure-led’.
The company, and its investors, will now be keen for progress in ongoing partnering processes.
“Both Edge and Inishkea are viewed as being drill-ready and our aim will be to secure a partner or partners to fund drilling activity on one or both licences at the earliest opportunity,” said Simon Oddie, interim chief executive in a statement.
He added: “We are confident that by adding FEL 3/19 to our portfolio we have not only increased the quantum of gross prospective gas resources to 2.7 tcf but have also increased the attractiveness of what was already a compelling investment proposition in the Slyne Basin.
“With gas set to play a key role in Ireland’s energy mix and our licences located near Corrib and its processing infrastructure, our position benefits from having a highly attractive risk/reward profile. With this in mind, we look forward to showcasing our new position to prospective partners, a number of whom we have been talking to for some time.”
DNO previously picked up FEL 3/19 as a non-core asset with its acquisition of North Sea firm Faroe Petroleum.
Elsewhere, Europa said it continues to look forward to the start of production at the Wressle field in Lincolnshire, onshore UK, which promises to substantially boost near-term production volumes.
Wressle, 30% owned by Europa, is slated to come online in the second half of 2020 and when it does it will double Europa’s production profile.
“We are well placed to advance our portfolio of licences up the development curve and in the process generate value for our shareholders,” the group said.