Interim Results
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil & Gas
15 April 2015
Europa Oil & Gas (Holdings) plc (`Europa' or `the Company')
Interim Results
Europa Oil & Gas (Holdings) plc, the AIM listed oil and gas exploration and
production company with a combination of producing, appraisal and exploration
assets in Europe, announces its interim results for the six month period ended
31 January 2015.
Highlights
* Irish prospect inventory received from Kosmos identified 1.5 billion
barrels of gross mean un-risked prospective oil resources
* Wressle exploration well in PEDL180, Lincolnshire, discovered oil with
aggregate production from all payzones of 710 boepd during testing
operations
* Applications submitted for 14th UK onshore licensing round
Financial performance
* Revenue £1.3m (H1 2014: £2.1m)
* Pre-tax loss prior to field impairments of £0.3m, (H1 2014: pre-tax profit
from continuing operations £0.5m)
* Pre-tax loss post field impairments of £1.4m (H1 2014: pre-tax profit from
continuing operations £0.5m)
* Net cash generated from operations £0.2m (H1 2014: £0.6m)
* Cash balance at 31 January 2015 £3.6m (31 January 2014: £4.8m)
Post reporting date events
* Farm-out of Tarbes Val d'Adour permit in France to Vermilion Energy
* Oil and gas production from four intervals tested at the Wressle discovery
in PEDL180
* The Kiln Lane exploration well in PEDL181, Lincolnshire was drilled and
abandoned; whilst not a discovery, oil shows indicate a working petroleum
system in the licence
* A new Jurassic hybrid play recently reported in PEDL137 in the Weald Basin
next to Europa's 40% owned PEDL143
* Retirement of Bill Adamson from the Board and appointment of Colin
Bousfield as Chairman
Europa's CEO, Hugh Mackay said, "We are confident the momentum that has been
established across our portfolio of multistage projects will be maintained in
the second half of 2015 and beyond: a CPR on our Irish and UK licences; an
extended well test on the Wressle discovery that may lead to a fast track
development; and the results of our applications in the 14th UK onshore
licensing round are anticipated following the general election. In addition, we
are working with our new farm-in partner and operator Vermilion Energy to
advance our Tarbes permit in onshore France and the farm-out of our Bearn des
Gaves permit onshore France is ongoing.
"Outside our existing portfolio, we are evaluating a number of new
opportunities, as we look to leverage our proven technical expertise to
generate significant value for shareholders. This is precisely what we have
done with our Irish licences, which our partner Kosmos Energy estimates have
gross mean un-risked prospective resources of up to 1.5 billion barrels of oil.
We are intent on building the very high reward component of our portfolio. Our
recent technical work indicates that there is substantial exploration upside in
the Porcupine Basin and we will be bidding for new licences in the 2015 Irish
Atlantic Margin licensing round."
For further information please visit www.europaoil.com or contact:
Hugh Mackay / Phil Greenhalgh Europa +44 (0) 20 7224 3770
Matt Goode / Simon Hicks finnCap Ltd +44 (0) 20 7220 0500
Frank Buhagiar / Lottie St Brides Partners Ltd +44 (0) 20 7236 1177
Brocklehurst
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.
Chairman's Statement
Since the last Chairman's Statement with the Annual Results in October 2014,
Europa has been through a period of increased activity, including:
* the drilling of two wells which targeted up to 5 million barrels of gross
prospective resources, which resulted in:
+ flow test rates of 710 barrels of oil equivalent per day (`boepd') from
the Wressle discovery, ahead of an extended well test (`EWT') which
should commence in Q2 2015, ahead of long term production
+ the indication of working petroleum system in the PEDL181 block
evidenced by the Kiln Lane exploration well. Well operations were
achieved efficiently, safely, on time and budget;
* the interpretation and evaluation of seismic surveys over our Porcupine
Basin licences where we have a 15% interest, resulted in gross prospective
resources estimated by the operator, Kosmos, approaching 1.5 billion
barrels. Europa's share of drilling costs being carried up to US$200m
across the two licences. The scale of the prospective resource is highly
encouraging and should assist with the planning for drilling activities;
* the farm-out of one of our French licences to the leading onshore operator
in the country, Vermillion, providing a carry of exploration costs up to €
4.65m in exchange for an 80% interest in the licence;
* the continued evaluation and discussion of acquisition opportunities.
These activities represent the latest stage in our programme to mature and grow
our portfolio of prospects and leads and most importantly prove these up via
the drill bit. Detailed post-drill analysis from the Wressle and Kiln Lane
wells is continuing, and should confirm additional potential in the two
licences. In addition to our existing inventory, we have applied for licences
in the 14th UK onshore round and are preparing our applications for the
forthcoming Irish offshore licencing round. We also continue to evaluate a
number of potential acquisition opportunities with a view to ensuring we have a
regular stream of activity and news flow, which is capable of increasing
Europa's value and share price.
All of this has been against a backdrop of a dramatic drop in oil prices which
has seen the price of Brent crude drop from US$94/bbl to the current level of
US$58/bbl. The oil price collapse has seen most E&P companies' share prices
fall, with some AIM listed E&Ps falling over 50% during this period. Europa's
share price has held relatively stable, and our standing amongst the 102 E&P
companies on AIM, as determined by market capitalisation, has risen from 64th
at the end of September 2014 to 53rd by the end of March 2015.
Hugh has previously indicated that we intend to complete a Competent Persons
Report (`CPR') on our licence portfolio and the first part of this, covering
our Irish acreage, is expected to be available by the end of May. The
exploration success at Wressle and the greater clarity on the risk and value in
our Irish prospects will be reflected in the CPR as we continue to mature our
portfolio through detailed technical work and the drill bit.
Financials
In the first half of 2015 our production sold for an average realised price of
US$78.3/bbl (H1 2014: US$108.3/bbl). Our average production of 144 boepd in the
period (H1 2014: 170boepd) was impacted by the loss of approximately 8 bopd
production from the WF9 well which at current prices is uneconomic to work
over. As a result, our revenue was £1.3 million (H1 2014: £2.1 million). Net
cash generated from operations was £0.2 million (H1 2014: £0.6 million). Our
cash balance at the end of January 2015 was £3.6 million (31 January 2014: £4.8
million).
The carrying value of each of our producing assets was tested for impairment.
Using a reduced forward oil price, there was a £1.1 million impairment of the
West Firsby field. There was no impairment at Crosby Warren or Whisby.
Administrative expenses in the period were £612,000 (H1 2014: £371,000) the
increase being due to legal costs incurred on the Tarbes farm-out and costs
associated with the 14th round and other licensing applications.
Board
In February 2015, Bill Adamson stepped down as Chairman to enable him to
concentrate on his work in the voluntary sector. Bill had been Chairman for
just under five years, during which time he presided over a period of
transition for the Company, including the appointment of Hugh Mackay as Chief
Executive. The Board and I would like to thank Bill on behalf of all
shareholders for his efforts during this period.
Outlook
Whilst the current oil price presents challenges for all E&P companies, I am
confident that Europa has an excellent portfolio of assets and opportunities.
With Wressle moving from prospect to discovery and soon onto an extended well
test ahead of full production, we are poised to see an increase in production,
revenue and cashflow. This should coincide with confirmation of the scale of
our Irish prospects and the next steps in their progress towards maturity. With
some progress in farming out our French permits and the potential for the award
of licences onshore UK and offshore Ireland, I am convinced that the next
months will be a very exciting time for Europa and its shareholders.
Finally, I would like to thank the management and operational teams, directors
and advisers for their hard work and also our shareholders for their continued
support over this six month period.
Colin Bousfield
Chairman
14 April 2015
Operational review
Europa operates exploration, production and appraisal assets across three EU
countries: Ireland, France and UK.
Ireland - Porcupine Basin Frontier Exploration Licences (`FELs') 2/13 and 3/13
15% (Beckett, Wilde and Doyle)
The primary exploration model for these licences is the Cretaceous
stratigraphic play: comprising Early Cretaceous turbidite sandstone reservoirs;
charged by mature Late Jurassic and Early Cretaceous source rocks and contained
in stratigraphic traps with elements of structural closure. The Cretaceous play
in Ireland is essentially undrilled and is considered to be analogous to the
same play in the equatorial Atlantic Margin province that has delivered the
Jubilee and Mahogany oil fields. The Jurassic exploration play remains of
interest and we note that on the Canadian side of the North Atlantic conjugate
margin Statoil has made three significant oil discoveries in the Flemish Pass
basin.
Under the terms of the farm-out in April 2013, Kosmos fully funded the costs of
a 3-D seismic acquisition programme over both FELs which was completed in
October 2013. Final processed data was delivered in April 2014 and in early
December 2014 Kosmos delivered a new prospect inventory. This showed combined
gross mean un-risked prospective resources of 1.5 billion barrels of oil
(resources by definition are recoverable) across both FEL 2/13 and FEL 3/13. On
FEL 3/13, prospects Beckett and Wilde have gross mean prospective resources of
760 million barrels of oil (`mmbo') and 493 mmbo respectively while in FEL 2/13
the Doyle A and Doyle B prospects have gross mean prospective resources of 123
mmbo and 69 mmbo.
The new prospect inventory is based on state of the art 3-D seismic data which
made full use of all the latest technical developments in acquiring, imaging
and interpreting data in deep-water environments. Desktop technical work on
risking and ranking the prospects is currently underway, in particular special
seismic analysis is being used to identify direct hydrocarbon indicators, flat
spots, conformance and AVO anomalies. This work is expected to be completed
later in 2015 and will enable a drill decision to be made. Europa has
commissioned a CPR on its two Irish licences and the results will be made
available shortly. Kosmos has indicated that a well might be drilled in H2 2016
or 2017.
If a decision is made to drill under the terms of the farm-out, Kosmos will
incur 100% of the costs of the first exploration well on each licence up to an
agreed cap. The first exploration wells on FEL 2/13 and FEL 3/13 have
investment caps of US$90 million and US$110 million respectively. Costs in
excess of the cap would be shared between Kosmos (85%) and Europa (15%).
The technical insights that Europa continues to gain from its work in the South
Porcupine Basin provides a competitive edge that the directors will seek to
exploit in securing new licences in the 2015 Atlantic Margin licensing round
that closes in September 2015.
France - Béarn des Gaves 100% (Berenx)
Europa holds a 100% interest in the onshore Béarn des Gaves permit in the
Aquitaine basin, the heartland of the French oil industry. The permit contains
two prospects: Berenx Deep and Berenx Shallow. Berenx Deep is an appraisal
project having previously been explored and drilled by EssoRep with two wells,
Berenx-1 (1969) and Berenx-2 (1972), both encountering strong gas shows over a
500 metre thick gas bearing zone. In 1975 Berenx-2 was re-entered, drill stem
tested and flowed gas to surface from the same carbonate reservoir that
delivered 9 tcf and 2 tcf from nearby fields at Lacq and Meillon.
Europa's in-house technical work indicates that the Berenx deep appraisal
prospect could hold in excess of 500 bcf of recoverable gas resources. In a CPR
dated 31 May 2012, ERC Equipoise estimated gross mean un-risked resources of
277 bcf for the Berenx deep gas play. The difference between Europa's and ERC's
assessment of resources reflects the confidence of each party in mapping in a
geologically complex terrain. Europa was able to map a larger area of closure
and as a consequence larger resources.
Previous exploration on the concession had focused on the deep gas
prospectivity. However, Europa's technical team has undertaken a re-evaluation
and interpretation of existing seismic and well data on the permit which
resulted in the definition of a shallow gas prospect, Berenx Shallow. The
recent discovery of previously missing seismic data by the French authorities,
together with a substantial seismic reprocessing project has delivered a
re-interpretation of structure and a better understanding of proven hydrocarbon
bearing reservoir distribution in the shallow Cretaceous and Late Jurassic
carbonate sediments. Europa estimates Berenx Shallow has potential gross mean
un-risked resources of 107 bcf of gas.
The Company's strategy for Béarn des Gaves is to first target the shallow gas
play, drill a well with the aim of delivering a commercial flow rate and, on
the back of commercial success, to further appraise the shallow prospectivity
and undertake work to de-risk the Berenx Deep appraisal prospect. The shallow
prospect can be tested with a comparatively simple exploration well with an
anticipated total depth of 2,500 metres.
On 3 October 2013, the permit was successfully renewed for a period of five
years from 22 March 2012 and carries an expenditure commitment of approximately
€2.5 million. The farm-out process for Bearn des Gaves is on-going in parallel
with planning and permitting for a Berenx shallow well to evaluate the 107 bcf
gross mean un-risked contingent resources. A lease has been obtained for the
drill site and drilling permit documentation is currently being exchanged with
the French authorities. Scoping economics suggests a value of US$11.5 boe and
NPV10 of US$170 million therefore the Directors believe that exploration
success at Berenx Shallow would be company-making for Europa.
France - Tarbes Val d'Adour 20%
Tarbes Val d'Adour Permit (`Tarbes') onshore France is located in the Aquitaine
basin onshore France close to the giant Lacq - Meillon gas fields. Tarbes
contains several oil accumulations that were previously licensed by Elf but
were abandoned in 1985 due to a combination of technical issues and low oil
prices. Two fields, Jacque and Osmets, were drilled using vertical wells which
generated modest production levels. In February 2015, Europa signed a Farm-Out
Agreement (`FOA') for Tarbes with Vermilion REP SAS, a wholly owned subsidiary
of Vermilion Energy Inc (`Vermilion') a Calgary, Alberta based international
oil and gas producer.
Under the terms of the FOA, Vermilion is to acquire an 80% interest in, and
operatorship of, Tarbes in exchange for assuming 100% of the cost of a work
programme, which may include seismic acquisition or reprocessing and drilling
operations up to a total of €4.65 million. Europa will hold the remaining 20%
interest and once costs above €4.65 million are incurred, Europa will be
responsible for its 20% share of future work programme costs.
The FOA is subject to the relevant approvals being granted by the French
authorities including the transfer of equity and operatorship to Vermilion and
also obtaining an extension for the permit. Both these processes are underway.
UK - NE Lincolnshire - PEDL180 33.3% (Wressle)
PEDL180 covers an area of 100km2 of the East Midlands Petroleum Province south
of the Crosby Warren field. Europa has a 33.3% working interest in the block
with its partners Egdon Resources (operator, 25%), Celtique Energie Petroleum
Ltd (33.3%) and Union Jack Oil (8.3%).
The Wressle exploration discovery well in PEDL180 was spudded in August 2014
and discovered hydrocarbons in four discrete intervals:
* the Ashover Grit - 80 bopd and 47 thousand cubic feet of gas per day
(`mcfd') free flow;
* the Wingfield Flags - 182 bopd and 456 mcfd free flow ;
* Zone 3b of the Penistone Flags - 12 bopd and 1,700 mcfd free flow;
* Zone 3a of the Penistone Flags - 77 bopd, swabbed.
A total of 710 boepd was therefore recovered during testing operations. A two
month EWT will commence in May 2015 to obtain more detailed and insightful
information about reservoir performance. This information will be used to
design an optimum Field Development Plan (`FDP') and enable a fast track
development. Any oil produced by the EWT will be sold. DECC approval of the FDP
is also required before long term production operations can take place.
Europa believes there is further exploration and appraisal upside along the
Crosby Warren (Europa producing field) to Wressle structural trend and will be
working to investigate these opportunities further.
UK - NE Lincolnshire - PEDL181 50% (Kiln Lane)
Europa has a 50% interest in and is the operator of licence PEDL181 in the
Humber Basin, with Egdon Resources UK Limited and Celtique Energie Petroleum
Ltd, each holding a 25% interest. PEDL181 is located in the Carboniferous
petroleum play and covers an area of over 540km2 in a working hydrocarbon
system where a number of discoveries have been made along the Brigg-Broughton
anticline, including Europa's existing oil production at the Crosby Warren
field at the westernmost end of the anticline.
Technical evaluation identified several conventional prospects and leads in
PEDL181. Four of these in the southern part of the licence were the focus of a
78 km 2-D seismic acquisition programme that was completed in April 2013.
Reprocessing of 150 km2 of existing 3-D seismic data together with processing
of the new data resulted in the identification of the Kiln Lane prospect.
Drilling operations at Kiln Lane-1 commenced on 23 February 2015 and a total
depth (`TD') of 2,291 metres was reached on 19 March. Sandstones in the
Westphalian and Namurian intervals were penetrated in line with the pre-drill
geological model and significant oil and gas shows were observed during
drilling operations. Wireline logging and subsequent petrophysical analysis
indicated that the sandstones encountered were water wet. The decision was
therefore taken to plug and abandon the well and restore the site to
agricultural use.
Kiln Lane was the first well to be drilled on this large licence where multiple
leads have been identified. The presence of hydrocarbon shows is encouraging
and Europa, along with its partners, will conduct a detailed post-drill
technical review of all relevant well and seismic data to determine the way
forward.
Whilst the results were disappointing Kiln Lane was a fast track exploration
well drilled against a very tight timeframe on schedule, on budget and safely.
It is a strong demonstration of our operational capability in the evolving UK
regulatory environment and we hope to deploy these skills following award of
any new licences in the 14th UK onshore licensing round.
UK - Dorking area - PEDL143 40% (Holmwood)
The PEDL143 licence covers an area of 92 km2 of the Weald Basin, Surrey. Europa
is the operator and has a 40% working interest in the licence with partners
Egdon Resources (38.4%), Altwood Petroleum (1.6%), and Warwick Energy (20%).
The Holmwood prospect is a conventional Jurassic sandstone reservoir with a low
geological risk. The May 2012 CPR estimated Holmwood to hold gross mean
recoverable resources of 5.64 mmbo. Europa considers Holmwood to be one of the
best undrilled conventional exploration prospects in the UK.
The prospect lies south of Dorking within the Surrey Hills Area of Outstanding
Natural Beauty. An application to construct a temporary exploration well on the
site was originally made in 2008. This application was refused in 2011 by
Surrey County Council contrary to their planning officer's recommendation to
approve. An appeal to overturn the decision was heard at a public inquiry in
July 2012. The appeal was dismissed on 26 September 2012.
Europa, along with its partners, applied for an order to quash the decision of
the Secretary of State for Communities and Local Government's appointed
Inspector to dismiss the appeal. On 25 July 2013, the Royal Courts of Justice
gave judgment in favour of Europa and quashed the Inspector's decision. An
appeal was submitted to the Court of Appeal which was subsequently dismissed by
the Court on 19 June 2014. As a result, Europa's appeal against Surrey County
Council's refusal to grant planning permission to drill one exploratory
borehole and undertake a short-term test for conventional hydrocarbons at the
Holmwood prospect has been remitted to the Planning Inspectorate for
redetermination. This will involve a further planning inquiry.
The planning inquiry for the Holmwood well will be conducted in two parts with
the first, for the original application site, taking place in April 2015. As a
consequence of changes to the regulatory regime, an application for planning
permission for the underground deviated well path is also required. In the
event that planning permission for the deviated well path is refused the
planning inspector will hear the evidence in the second part of the planning
enquiry and make one decision for both the surface site and deviated
underground well path. Following the inquiry it is expected that the planning
inspector's decision should be announced in H2 2015. A successful outcome would
result in drilling the Holmwood exploration well, with 2016/17 being the most
realistic timing for this activity.
An exciting new play has recently been reported by UK Oil & Gas Investments PLC
in the adjacent PEDL137 following analysis of the Horse Hill-1 exploration well
drilled in 2014. In an RNS dated 9 April 2015 a new play identified by the
Horse Hill-1 well is reported; the "Jurassic hybrid play". Given the immediate
proximity of our 35 square mile PEDL143 the potential for this new play to
extend into our licence will be evaluated. Our focus remains on obtaining a
favourable outcome at the planning inquiry and drilling the conventional oil
exploration well at Holmwood.
UK - Production (West Firsby 100%; Crosby Warren 100%; Whisby W4 well 65%)
Europa produces hydrocarbons from six wells across three fields: Crosby Warren
(100% interest); Whisby (65% interest); and West Firsby (100% interest). The
three UK fields produced an average of 144 boepd during the six month period
under review and full year production is on course to meet expectations of 144
boepd.
Conclusion
The first half of the year saw a number of key milestones achieved, including
the drilling of the Wressle well, licence applications in the 14th UK onshore
licensing round and the delivery of a prospect inventory for offshore Ireland
from Kosmos Energy, showing gross prospective resources of up to 1.5 billion
barrels. Technical work by Europa has provided strong encouragement to
participate in the 2015 Irish Atlantic Margin licensing round. The second half
has carried on where the first left off: Wressle has been declared an oil and
gas discovery after hydrocarbons flowed from four discreet payzones in testing
operations; the Tarbes licence onshore France has been farmed out which, once
the relevant approvals are in place, will allow operations to commence; and the
drilling of the Kiln Lane well on the previously undrilled PEDL181 licence
which, while not a discovery, encountered encouraging oil shows and we feel
there is further upside in our NE Lincolnshire licences. This is an exciting
period for Europa, as management focuses on monetising the underlying value of
the Company's asset base and in the process generate significant value for
shareholders.
Hugh Mackay
CEO
14 April 2015
Licence Interests Table
Field/
Country Area Licence Prospect Operator Equity Status
DL003 West Firsby Europa 100% Production
DL001 Crosby Warren Europa 100% Production
PL199/215 Whisby-4 BPEL 65% Production
East
UK Midlands PEDL180 Wressle Egdon 33% Exploration
PEDL181 Kiln Lane Europa 50% Exploration
PEDL182 Broughton Egdon 33% Exploration
Weald PEDL143 Holmwood Europa 40% Exploration
FEL 2/13 Doyle Kosmos 15% Exploration
Ireland Porcupine
FEL 3/13 Beckett, Kosmos 15% Exploration
Wilde Shaw (lead)
Béarn des Gaves Berenx Deep Europa 100% Exploration/
Appraisal
France Aquitaine Béarn des Gaves Berenx Europa 100% Exploration/
Shallow Appraisal
Tarbes val Vermilion 20% Exploration/
d'Adour Appraisal
Financials
Unaudited consolidated statement of comprehensive income
6 months to 6 months to Year to
31 January 31 January 31 July
2015 2014 2014
(restated) (audited)
£000 £000 £000
Revenue 1,285 2,060 3,878
Other cost of sales (944) (1,100) (2,301)
Impairment of producing fields (1,100) - (1,203)
Total cost of sales (2,044) (1,100) (3,504)
--------- --------- ---------
Gross(loss)/profit (759) 960 374
Administrative expenses (612) (371) (832)
Finance income 62 7 20
Finance expense (105) (120) (244)
--------- --------- ---------
(Loss)/profit before taxation (1,414) 476 (682)
Taxation credit/(charge) 587 (231) 314
--------- --------- ---------
(Loss)/profit for the period from (827) 245 (368)
continuing operations
Discontinued operations - 386 933
Profit for the period from discontinued
operations
--------- --------- ---------
(Loss)/profit for the period attributed to (827) 631 565
the equity holders of the parent
Other comprehensive income
Recycling of foreign currency translation - (417) (417)
of foreign operations
--------- --------- ---------
Total comprehensive (loss)/profit for the (827) 214 148
period attributable to the equity
shareholders of the parent
========= ========= =========
Pence per Pence per Pence per
share share share
(Loss)/Earnings per share (LPS/EPS)
attributable
to the equity shareholders of the parent
Attributable to the equity shareholders
of thw
Basic and diluted (LPS)/EPS from (0.40)p 0.17 (0.21)p
continuing operations
Basic and diluted (LPS)/EPS from - 0.27 0.53p
discontinued operations
Basic and diluted (LPS)/EPS from (0.40)p 0.44 0.32p
continuing and discontinued operations
Unaudited consolidated statement of financial position
31 January 31 January 31 July
2015 2014 2014
(restated) (audited)
£000 £000 £000
Assets
Non-current assets
Intangible assets 4,516 2,594 3,553
Property, plant and equipment 1,795 4,134 3,046
Deferred tax asset 475 - -
--------- --------- ---------
Total non-current assets 6,786 6,728 6,599
--------- --------- ---------
Current assets
Inventories 38 43 32
Trade and other receivables 684 665 456
Cash and cash equivalents 3,569 4,816 4,501
--------- --------- ---------
4,291 5,524 4,989
--------- --------- ---------
Other current assets
Assets classified as held for sale - 338 -
Total assets 11,077 12,590 11,588
========= ========= =========
Liabilities
Current liabilities
Trade and other payables (1,299) (1,003) (970)
Current tax liability (220) (871) (220)
Derivative (40) (41) (35)
Short-term borrowings (23) (197) (22)
Short-term provisions - (21) (4)
--------- --------- ---------
Total current liabilities (1,582) (2,133) (1,251)
--------- --------- ---------
Non-current liabilities
Long-term borrowings (152) - (164)
Deferred tax liabilities (2,259) (2,799) (2,371)
Long-term provisions (2,054) (1,764) (1,959)
--------- --------- ---------
Total non-current liabilities (4,465) (4,563) (4,494)
--------- --------- ---------
Total liabilities (6,047) (6,696) (5,745)
--------- --------- ---------
Net assets 5,030 5,894 5,843
========= ========= =========
Capital and reserves attributable to
equity holders of the parent
Share capital 2,049 2,049 2,049
Share premium 14,080 14,080 14,080
Merger reserve 2,868 2,868 2,868
Retained deficit (13,967) (13,103) (13,154)
--------- --------- ---------
Total equity 5,030 5,894 5,843
========= ========= =========
Unaudited consolidated statement of changes in equity
Share Share Merger Foreign Retained Total
capital premium reserve exchange deficit equity
reserve
£000 £000 £000 £000 £000 £000
Unaudited - restated
Balance at 1 August 1,379 13,160 2,868 417 (15,921) 1,903
2013
Profit for the period - - - - 631 631
attributable to the
equity shareholders
of the parent
Other comprehensive - - - (417) - (417)
loss for the period
Share based payments - - - - 67 67
Issue of share 670 920 - - 2,120 3,710
capital net of issue
costs
--------- --------- --------- --------- --------- ---------
Balance at 31 January 2,049 14,080 2,868 - (13,103) 5,894
2014
========= ========= ========= ========= ========= =========
Audited
Balance at 1 August 1,379 13,160 2,868 417 (15,921) 1,903
2013
Profit for the year - - - - 565 565
attributable to the
equity shareholders
of the parent
Other comprehensive - - - (417) - (417)
loss for the period
Share based payments - - - - 82 82
Issue of share 670 920 - - 2,120 3,710
capital net of issue
costs
--------- --------- --------- --------- --------- ---------
Balance at 31 July 2,049 14,080 2,868 - (13,154) 5,843
2014
========= ========= ========= ========= ========= =========
Unaudited
Balance at 1 August 2,049 14,080 2,868 - (13,154) 5,843
2014
Total comprehensive - - - - (827) (827)
loss for the period
Share based payments - - - - 14 14
--------- --------- --------- --------- --------- ---------
Balance at 31 January 2,049 14,080 2,868 - (13,967) 5,030
2015
========= ========= ========= ========= ========= =========
Unaudited consolidated statement of cash flows
6 months to 6 months to Year to
31 January 31 January 31 July
2015 2014 2014
(restated) (audited)
£000 £000 £000
Cash flows from operating activities
(Loss)/profit after taxation (827) 245 (368)
Adjustments for:
Share based payments 14 67 82
Depreciation 156 251 475
Impairment of property, plant & equipment 1,100 - 1,203
Finance income (62) (7) (20)
Finance expense 105 120 244
Taxation (credit)/expense (587) 231 (314)
(Increase)/decrease in trade and other (46) (43) 184
receivables
(Increase) / decrease in inventories (6) (10) 1
Increase/(decrease) in trade and other 360 (249) (60)
payables
--------- --------- ---------
Cash generated from continuing operations 207 605 1,427
Profit after taxation from discontinued - 386 933
operations
Adjustment for: -
Profit on disposal (411) (1,034)
--------- --------- ---------
Cash used in discontinued operations - (25) (101)
Income tax payment - - (537)
--------- --------- ---------
Net cash from operating activities 207 580 789
========= ========= =========
Cash flows used in investing activities
Purchase of property, plant & equipment (1) (2) (3)
Purchase of intangibles (1,184) (170) (514)
Receipt for licence back costs in - 300 300
connection with farm-in
Expenditure on well decommissioning - (344) (363)
Interest received 5 - 6
--------- --------- ---------
Net cash used in investing activities (1,180) (216) (574)
========= ========= =========
Cash flows from financing activities
Proceeds from issue of share capital (net - 3,710 3,710
of issue costs)
Decrease in payables related to share issue - 120 -
costs
Repayment of borrowings (11) (11) (22)
Finance costs (18) (8) (25)
--------- --------- ---------
Net cash (used in)/ from financing (29) 3,811 3,663
activities
========= ========= =========
Net (decrease)/increase in cash and cash (1,002) 4,175 3,878
equivalents
Exchange gain/(loss) on cash and cash 70 (31) (49)
equivalents
Cash and cash equivalents at beginning of 4,501 672 672
period
--------- --------- ---------
Cash and cash equivalents at end of period 3,569 4,816 4,501
========= ========= =========
Notes to the consolidated interim statement
1 Nature of operations and general information
Europa Oil & Gas (Holdings) plc ("Europa Oil & Gas") and subsidiaries' ("the
Group") principal activities consist of investment in oil and gas exploration,
development and production.
Europa Oil & Gas is the Group's ultimate parent Company. It is incorporated and
domiciled in England and Wales. The address of Europa Oil & Gas's registered
office head office is 6 Porter Street, London W1U 6DD. Europa Oil & Gas's
shares are listed on the London Stock Exchange AIM market.
The Group's consolidated interim financial information is presented in Pounds
Sterling (£), which is also the functional currency of the parent Company.
The consolidated interim financial information has been approved for issue by
the Board of Directors on 14 April 2015.
The consolidated interim financial information for the period 1 August 2014 to
31 January 2015 is unaudited. In the opinion of the Directors the condensed
interim financial information for the period presents fairly the financial
position, and results from operations and cash flows for the period in
conformity with the generally accepted accounting principles consistently
applied. The condensed interim financial information incorporates unaudited
comparative figures for the interim period 1 August 2013 to 31 January 2014 and
the audited financial year to 31 July 2014.
The financial information contained in this interim report does not constitute
statutory accounts as defined by section 435 of the Companies Act 2006. The
report should be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 July 2014.
The comparatives for the full year ended 31 July 2014 are not the Company's
full statutory accounts for that year. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified and did not contain a statement under
section 498 (2) - (3) of the Companies Act 2006.
The information has been prepared on the going concern basis.
2 Summary of significant accounting policies
The condensed interim financial information has been prepared using policies
based on International Financial Reporting Standards (IFRS and IFRIC
interpretations) issued by the International Accounting Standards Board
("IASB") as adopted for use in the EU. The condensed interim financial
information has been prepared using the accounting policies which will be
applied in the Group's statutory financial information for the year ended 31
July 2015.
This results in the adoption of various standards and interpretations, none of
which have had a material impact on the interim report or are expected to have
a material impact on the financial statements for the full year.
3 Share capital
The table below shows all shares issued since 31 July 2013.
Date Shares issued Price £000 Total shares
raised net of in issue
commission
and costs
10 January 2014 - Placing 47,694,665 6p 2,597 185,550,169
21 January 2014 - Open Offer 19,332,855 6p 1,113 204,883,024
31 January 2015 204,883,024
All the authorised and allotted shares are of the same class and rank pari
passu.
Merger relief is available on the Placing shares under section 612(1) of the
Companies Act 2006, and premium has therefore been recognised within retained
deficit rather than share premium.
4 Loss / earnings per share (LPS/EPS)
Basic LPS has been calculated on the loss after taxation divided by the
weighted average number of shares in issue during the period. Diluted LPS uses
an average number of shares adjusted to allow for the issue of shares, on the
assumed conversion of all in-the-money options.
The Company's average share price for the period was 7.35p (H1 2014: 8.51p)
which was above the exercise price of 1,391,626 of the 14,016,626 outstanding
share options (H1 2014: which was above the exercise price of 1,391,626 of the
13,076,626 outstanding share options).
The calculation of the basic and diluted (loss)/ earning per share is based on
the following:
6 months to 6 months to Year to
31 January 31 January 31 July
2015 2014 2014
(audited)
£000 £000 £000
Profits / losses
(Loss)/profit after tax from continuing (827) 245 (368)
operations
Profit/(loss) for the year from - 386 933
discontinued operations
--------- --------- ---------
Profit/(loss) for the period (827) 631 565
attributable to the equity shareholders
of the parent
========= ========= =========
Number of shares
Weighted average number of ordinary 204,883,024 144,713,895 174,551,189
shares for the purposes of basic EPS/
LPS
Weighted average number of ordinary 205,196,140 145,296,059 174,551,189
shares for the purposes of diluted EPS/
LPS
5 Taxation
Consistent with the year-end treatment, current and deferred tax assets and
liabilities have been calculated at tax rates which were expected to apply to
their respective period of realisation at the period end.
6 Post reporting date
* Farm-out of Tarbes Val d'Adour permit in France to Vermilion Energy
* Oil and gas production from four intervals tested at the Wressle discovery
in PEDL180, Lincolnshire
* The Kiln Lane exploration well in PEDL181, Lincolnshire was drilled and
abandoned; whilst not a discovery, oil shows indicate a working petroleum
system in the licence
* A new Jurassic hybrid play recently reported in PEDL137 in the Weald Basin
next to Europa's 40% owned PEDL143
* Retirement of Bill Adamson from the Board and appointment of Colin
Bousfield as Chairman
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