Oil and gas company Europa Oil & Gas has agreed to acquire an offshore license in Ireland, near the producing Corrib gas field, from DNO.
Europa said the block, formally known as Frontier Exploration Licence (‘FEL’) 3/19, contains the 1.2 tcf Edge prospect.
"The acquisition, which is subject to regulatory sign-off, will provide Europa with a key strategic position in the proven gas play of the Slyne Basin and is in line with the refocusing of the Company’s portfolio in Ireland towards gas," Europa Oil & Gas said.
FEL 3/19, which lies 18km east of the producing Corrib gas field, was formerly the LO 16/23 block which DNO acquired following the acquisition of Faroe Petroleum.
Europa is acquiring a 100% interest in the license from DNO for a nominal upfront fee and the granting of a 5% Net Profits Interest (“NPI”) over future production of gas and liquids from any accumulation on FEL 3/19 to DNO.
FEL 3/19 lies close to Europa’s own FEL 4/19 which is home to the 1.5 tcf Inishkea prospect. Located near Corrib and associated gas processing infrastructure, the Company classifies FELs 3/19 and 4/19 as lower risk “infrastructure-led” exploration.
All work commitments on FEL 3/19 have been fulfilled and, subject to regulatory approval, Europa’s forward plan will be to include FEL 3/19 in a relaunch of the farmout of its strategic position in the Slyne Basin.
Seeking drilling partners
Simon Oddie, Interim CEO and Executive Chairman of Europa, said: “Subject to regulatory approval, our position in the Slyne Basin gas play will soon include the 1.2 tcf Edge prospect on FEL 3/19, as well as our own 1.5 tcf Inishkea prospect on FEL 4/19. 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 licenses 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.
“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 licenses at the earliest opportunity. Together with ongoing work on the ground to bring the Wressle field in Lincolnshire into production in H2 2020 at an initial gross rate of 500bopd, which would more than double Europa’s existing UK onshore production to over 200bopd, we are well placed to advance our portfolio of licenses up the development curve and in the process generate value for our shareholders.”