CPR on Wressle Discovery & Broughton North ...

Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas

26 September 2016

Europa Oil & Gas (Holdings) plc (‘Europa’ or ‘the Company’)

 Competent Person’s Report on Wressle Discovery and Broughton North Prospect, Onshore UK

Europa Oil & Gas (Holdings) plc, the AIM traded oil and gas exploration, development and production company focused on the UK and Ireland, is pleased to announce the results of an independent Competent Person’s Report (‘CPR’) prepared by ERC Equipoise Ltd (‘ERCE’), including estimates of Reserves and Contingent and Prospective oil and gas Resources for the UK onshore Wressle discovery (‘Wressle’) and Broughton North prospect.

Wressle and Broughton North are located on licences PEDL180 and PEDL182 and lie on structural trend with and 5 km from the Europa operated Crosby Warren field in East Lincolnshire. Europa has a 33.34% working interest in both licences, alongside Egdon (operator, 25.00%), Celtique Energie Petroleum Ltd (33.33%), and Union Jack Oil (8.33%).

ERCE’s letter to Europa’s Board of Directors summarising the findings of their CPR has been published on Europa’s website (www.europaoil.com).

Wressle

• Gross Mean Discovered Stock Tank Oil Initially In Place (‘STOIIP’) of 14.18 million stock tank barrels (‘stb’) across three reservoir sands: Ashover Grit; Wingfield Flags; and Penistone Flags
• 2.15 million stb classified as discovered - as proved and probable reserves (‘2P’) and contingent resources (‘2C’)
• Gross 2P Reserves across the Ashover Grit and Wingfield Flags:
  • 0.62 million stb of oil (Justified For Development) - provide the basis for initial Field Development Plan (‘FDP’)
  • 0.20 billion standard cubic feet of gas (Justified For Development) - monetisation via on-site power generation with excess power sold into the National Grid
• Substantial resources confirmed in the Penistone Flags - gross 2C Resources of 1.53 million stb of oil and 2.0 billion standard cubic feet (‘Bscf’) of gas
• Production at an estimated gross rate of 500 barrels of oil per day (‘bopd’) expected to commence in early 2017, subject to receipt of all approvals - FDP and planning application with the Oil and Gas Authority (‘OGA’) and North Lincolnshire Council respectively

• Plans to produce from the Penistone Flags to be progressed following commencement of production from Ashover Grit - to include monetisation of gas resource by pipeline export or electricity generation and export

Broughton North Prospect

• High Geological Chance of Success of 40% to 49% assigned by ERCE to Broughton North which is in a fault block immediately to the north-west of Wressle
• STOIIP for Broughton North is 3.43 million stb across the Ashover Grit and Penistone Flags with Mean Prospective Resources of 0.51 million stb of oil plus 0.51 billion standard cubic feet of gas.

Europa CEO Hugh Mackay said, “Based on the results of this independent CPR, not only is Wressle expected to more than double our net production when it comes on stream in early 2017 at a gross rate of 500bopd, but it also substantially increases Europa’s asset backing.  In addition to the immediate boost to our proven reserves, the CPR highlights significant contingent resources in the Penistone Flags at Wressle and work will shortly commence on drawing up a development plan to monetise this reservoir. The commencement of production at Wressle will be significant for Europa as it is expected to lead to a material increase in the Company’s revenue and operational cashflow.  With this in mind ERCE’s assessment of Broughton North as low risk is also exciting, as it provides us with another drill ready prospect within our growing portfolio of UK onshore licences.”

Table summarising gross volumes at Wressle and Broughton North along with net volumes attributed to Europa’s interests

		Gross Volumes			Net Volumes attributable to Europa
	Oil MMstb	Gas Bscf	Oil and Gas* MMboe	Oil MMstb	Gas     Bscf	Oil and Gas* MMboe
Wressle 2P Ashover Grit  and Wingfield Flags	0.62	0.20	0.65	0.21	0.07	0.22
2C Penistone Flags	1.53	2.00	1.86	0.51	0.67	0.62
Broughton North Mean Unrisked  Prospective Resources	0.51	0.51	0.60	0.17	0.17	0.20

*Gas converted to oil equivalent using a 6Bscf/MMboe conversion and added to oil volume

Glossary:

Some of the terms used in this announcement are defined below. A more exhaustive glossary is contained in ERCE’s letter to Egdon’s Board of Directors summarising the findings of their CPR has been published on the Company’s website (www.egdon-resources.com).

Proved Reserves

Proved  Reserves  are  those  quantities  of  petroleum,  which  by  analysis  of  geoscience  and  engineering data,  can  be  estimated  with  reasonable certainty  to  be  commercially  recoverable,  from  a  given  date forward,  from  known  reservoirs  and  under  defined  economic  conditions,  operating  methods,  and government regulations.

If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered.  If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. The area of the reservoir considered as Proved includes:

• the  area  delineated  by  drilling  and  defined  by  fluid  contacts,  if  any,  and
• adjacent  undrilled  portions  of  the  reservoir  that  can  reasonably  be  judged  as  continuous with  it  and  commercially  productive  on  the  basis  of  available  geoscience  and  engineering data

In the absence of data on fluid contacts, Proved quantities in a reservoir are limited by the lowest known hydrocarbon  (LKH)  as  seen  in  a  well  penetration  unless  otherwise  indicated  by  definitive  geoscience, engineering,  or  performance  data.  Such definitive  information  may  include  pressure  gradient  analysis and  seismic  indicators.  Seismic  data  alone  may  not  be  sufficient  to  define  fluid  contacts  for  Proved Reserves  (see  “2001  Supplemental  Guidelines,”  Chapter  8).  Reserves  in  undeveloped  locations  may  be classified as Proved provided that the locations are in undrilled areas of the reservoir that can be judged with reasonable certainty to be commercially productive and interpretations of available geoscience and engineering  data  indicate  with  reasonable  certainty  that  the  objective  formation  is  laterally  continuous with drilled Proved locations.  For  Proved  Reserves,  the  recovery  efficiency  applied  to  these  reservoirs  should  be  defined  based  on  a range  of  possibilities  supported  by  analogues  and  sound  engineering  judgment  considering  the characteristics of the Proved area and the applied development programme.

2P 

Proved + Probable, a best estimate category of Reserves.

Contingent Resources 

Contingent  Resources  are  those  quantities  of  petroleum  estimated,  as  of  a  given  date,  to  be  potentially recoverable  from  known  accumulations  by  application  of  development  projects,  but  which  are  not currently considered to be commercially recoverable due to one or more contingencies.

Contingent  Resources  may  include,  for  example,  projects  for which  there  are  currently  no  viable markets,  or  where  commercial  recovery  is  dependent  on  technology  under  development,  or  where evaluation  of  the  accumulation  is  insufficient  to  clearly  assess  commerciality.  Contingent  Resources  are further  categorized  in  accordance  with  the  level  of  certainty  associated  with  the  estimates  and  may  be sub?classified based on project maturity and/or characterized by their economic status.

2C 

A best estimate category of Contingent Resources.

Prospective Resources 

Prospective  Resources  are  those  quantities  of  petroleum   which  are  estimated,  as  of  a  given  date,  to  be potentially recoverable from undiscovered accumulations. Potential accumulations are evaluated according to their chance of discovery and, assuming a discovery, the  estimated  quantities  that  would  be  recoverable  under  defined  development  projects.  It  is recognized  that  the  development  programs  will  be  of significantly  less  detail  and  depend  more  heavily on analog developments in the earlier phases of exploration.

* * ENDS * *

For further information please visit http://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
Simon Hicks	finnCap Ltd	+ 44 (0) 20 7220 0500
Frank Buhagiar	St Brides Partners Ltd	+ 44 (0) 20 7236 1177
Susie Geliher	St Brides Partners Ltd	+ 44 (0) 20 7236 1177

Notes

Europa Oil & Gas (Holdings) plc has a diversified portfolio of multi-stage hydrocarbon assets that includes production, exploration and development interests, in countries that are politically stable, have transparent licensing processes, and offer attractive terms.  In H1 2016 Europa produced 124 boepd.  Its highly prospective exploration projects include the Wressle development (targeting production start-up in early 2017 at up to 500 bopd gross) in the UK; 100% owned gas exploration prospect (107 bcf) and appraisal project (CPR 277 bcf) in onshore France, a joint venture with Vermilion Energy also in onshore France; and seven licences offshore Ireland with the potential to host gross mean un-risked prospective and indicative resources of more than 4 billion barrels oil equivalent and 1.5 tcf gas across all seven licences.

Qualified Person Review

This release has been reviewed by Hugh Mackay, Chief Executive of Europa, who is a petroleum geologist with 30 years' experience in petroleum exploration and a member of the Petroleum Exploration Society of Great Britain, American Association of Petroleum Geologists and Fellow of the Geological Society. Mr Mackay has consented to the inclusion of the technical information in this release in the form and context in which it appears.