Interim Results

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

12 April 2019

Europa Oil & Gas (Holdings) plc (“Europa” or “the Company”)

Interim Results

Europa Oil & Gas (Holdings) plc, the AIM traded Ireland and UK focused oil and gas exploration, development and production company, announces its interim results for the six month period ended 31 January 2019.

Operational highlights

• Ongoing negotiations regarding farm-in agreements to three Irish licences (LO 16/20, FEL 1/17 and FEL 3/13) with a major international oil company:
  • expect Europa to be fully carried on a well on each licence
  • expect Europa to retain a material interest in each licence
  • the Board is confident of concluding the farm-ins in the coming months however, there can be no guarantee that the current negotiations will lead to completed agreements
  • final investment decision awaited from the major’s head office
• Site surveys for wells at Inishkea, Kiely East and Edgeworth – targeting summer 2019, are under application subject to regulatory approval
• Successfully executing strategy to manage the decline in production at onshore UK fields
  • workover of the WF6 well at West Firsby utilising a drain hole jetting technique - WF6 is currently producing 6 boepd net to Europa having previously produced zero oil
  • 90 boepd produced in H1 2019 (H1 2018 97 boepd)
• Final phase of discussions with the National Office of Hydrocarbons and Mines (“ONHYM”), in respect of securing a petroleum agreement in Morocco

Financial performance

• Revenue £0.9 million (H1 2018: £0.8 million)
• Pre-tax loss of £0.4 million, (H1 2018: pre-tax tax loss of £0.5 million)
• Net cash used in operating activities £0.3 million (H1 2018: cash from operating activities £16k)
• Cash balance at 31 January 2019: £4.4 million (31 July 2018: £1.8 million)
• Successfully raised £4.3 million (before expenses) from existing and new shareholders including BGF Investment Management Limited, a wholly owned subsidiary of the Business Growth Fund (“BGF”)
  • approximately 33% of the shares in the Company now owned by institutions,
  • a further 9.5% are held by the Board

Post reporting period events

• Wressle planning appeal submitted to Planning Inspectorate on 5 February 2019 and draft bespoke programme issued by the Inspectorate on 13 February
• Gross un-risked prospective resources at the Inishkea gas prospect in LO 16/20 confirmed as 1.5 tcf with one in three chance of success (RNS 26 February 2019)
• Transferred operatorship of PEDL143 to UK Oil & Gas PLC as announced on 14 March 2019

Europa's CEO, Hugh Mackay, said: “The last six months have been a highly active period for Europa, not just in terms of the progress we are making to advance our industry-leading licence position offshore Ireland, which to date has estimated gross prospective resources of 6.4 billion barrels of oil and 1.5 tcf of gas and where negotiations are ongoing for a farm-in for three licences with a major international oil and gas company. In addition, we completed a £4.3 million fund raising, which increased the institutional representation on our shareholder register to over one third. We also restored production at the WF6 well at West Firsby and moved closer towards landing a high impact new venture in Morocco. 

“The momentum behind the Company has continued post period end with the completion of a major piece of exploration work at our flagship Inishkea gas project. I look forward to providing further updates on our progress during the second half, a period which will see the resumption of drilling activity in the South Porcupine Basin at CNOOC International’s Iolar prospect.  Success here would be a value trigger event for Europa, as it would significantly de-risk our drill-ready prospects in the basin, specifically, the 280mmboe Kiely East and 225mmboe Edgeworth targets.”

For further information please visit www.europaoil.com or contact:

Hugh Mackay / Phil Greenhalgh	Europa	[phone]
Matt Goode	finnCap Ltd	[phone]
Simon Hicks	finnCap Ltd	[phone]
Camille Gochez	finnCap Ltd	[phone]
Frank Buhagiar / Susie Geliher	St Brides Partners Ltd	[phone]

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Chairman’s Statement

Our objective is to create a significant liquidity event for our shareholders through successful drilling of our high impact exploration portfolio in Atlantic Ireland.  I am pleased to report that the six months under review has seen us take significant steps towards presenting our shareholders with a series of potential liquidity events.  On 20 November 2018, we announced that we were negotiating farm-in agreements with a major international oil and gas company in respect of Licensing Option (‘LO’) 16/20 in the Slyne Basin and Frontier Exploration Licences (‘FEL’) 1/17 and 3/13 in the South Porcupine Basin.   We continue to have positive engagement with the potential farminee and remain confident of the completion of these agreements or similar ones with other potential farminees who are active in our virtual and physical data rooms. We believe that the political environment in Ireland, in particular the Climate Emergency Measures Bill, may be causing potential investors, including farminees, to slow down their investment decisions.

The Climate Emergency Measures Bill (the “Bill”) is a proposal to limit future oil and gas exploration in Ireland which is progressing through the Irish legislature. If put into law this Bill would stop the issuance of any new licences for the exploration of fossil fuels. The Bill is opposed by the Irish Government. We do not know if it will pass into law and should it do so when that might be, and in what form. The impact on existing exploration licences is also not clear.

Europa has honoured its work commitments and obligations to the Irish Government and naturally we hope that our investment will be recognised and honoured.  Europa is an active member of the Irish Offshore Operators’ Association (“IOOA” www.iooa.ie). IOOA believes that in order to shape a coherent, realistic, fully-costed and structured national policy and plan to transition to a low carbon future, that a new and informed energy conversation needs to begin. IOOA is actively engaged in this matter and further information can be found at https://www.iooa.ie/value-of-the-indigenous-oil-and-gas-industry-to-ireland/

Offshore Ireland

Our industry-leading licence position offshore Ireland is comprised of six licences covering an area of 4,985 km² and encompassing all the play types and basins being targeted by the major operators who have already entered the region, such as Exxon, CNOOC International, Equinor, TOTAL, Woodside and Cairn Energy.  To date, we have identified over 30 prospects across our licences which, potentially hold combined Gross Mean Un-risked Prospective Resources (“GMUPR”) of over 6.4 billion barrels of oil equivalent and 1.5 tcf of gas. Following completion of technical work programmes, we are now focused on securing partners with whom we can drill wells to prove up this ‘company-making’ prospectivity. 

The volumetrics involved and the quality of the work we have undertaken have generated considerable interest among the blue-chip operators as evidenced by their activity in our data rooms.  As mentioned earlier, we are currently negotiating farm-in agreements with a major international oil and gas company in respect of LO 16/20, FEL 1/17 and FEL 3/13.  A final investment decision is awaited from the major’s head office. Meanwhile, we continue to run data rooms and market the opportunities to others. We have submitted applications to the relevant authorities for three site surveys in Atlantic Ireland for our flagship Inishkea prospect, Kiely East and Edgeworth.  Our aim is to be in a position to drill all three prospects from 2020 onwards, subject to funding and the regulatory approval process.

Post period end on 26 February 2019, we announced a new prospect inventory for LO 16/20 including gross mean un-risked prospective dry gas resources of 1.5 tcf and a 1 in 3 chance of success for the Inishkea prospect.  Together with a location in a play that has been proven by the nearby Corrib gas field, proximity to existing gas infrastructure, comparatively shallow water and lying in a country that needs more gas, the volumetrics are the final piece in the jigsaw which confirms Inishkea’s status as Europa’s flagship project.  

Onshore UK

Our UK production assets in the East Midlands continue to generate a valuable revenue stream for the Company.  First half production averaged 90 boepd generating revenue of £0.9 million, 12% higher than H1 2018’s £0.8 million thanks to higher oil prices and initiatives we undertook to manage the decline at the West Firsby oil field.  These included the successful workover of the WF6 well where we, in conjunction with a third party, pioneered the use of a drain hole jetting technique onshore UK. WF6 is currently producing 6 bopd net to Europa having previously produced zero oil.  Based on the technical success of the workover we intend to evaluate additional suitable opportunities to use this technology in other wells leading to higher oil rates than would otherwise have been possible.

We are keen to grow our production incrementally - via workovers such as WF6, and by bringing new discoveries on line. Wressle in North Lincolnshire, with an initial targeted gross rate of 500 bopd, would more than double Europa’s existing net production to over 200 bopd.  The planning appeal process formally commenced post period end on 13 February 2019 and a planning inquiry date will be announced in due course when a Planning Inspector will consider the partners’ new proposals for the development. Other proposals have previously been recommended for approval by the Council’s Planning Officer and supported by expert third party review undertaken on behalf of the Council.

New Ventures

A Strategic Review was completed during the review period. This identified areas and basins   where the expertise of our technical team could be applied to replicate the excellent work carried out in our offshore Ireland licences.  In line with this, over the course of the half year under review we have been in discussions with the National Office of Hydrocarbons and Mines (ONHYM) to secure a petroleum agreement in Morocco.  These discussions are nearing completion and we are confident we will soon be in a position to provide further details on what we believe is an exciting opportunity to acquire acreage which, in terms of ‘company-making’ potential, is similar in scale to our offshore Ireland portfolio. We have also established a new Board Strategy Committee, to review and approve value-accretive new venture opportunities within our areas of interest.

Corporate

During the period, we successfully raised £4.3million from existing and new shareholders.  Following the fundraise, BGF are the largest shareholder in Europa, with an equity share close to 15%.  One third of the Company’s shares are now held by institutions and the Board holds a further 9.5%.  This is a significant increase in institutional representation in Europa’s shareholder register and we view this as an endorsement of our asset base, strategy to monetise our assets, and finally the efforts of our excellent team.

Outlook

As at 31 January 2019, Europa’s cash balances stood at £4.4 million (31 July 2018: £1.8 million). Our UK production, which averaged 90 boepd over the course of the half year period, generated £0.9 million in revenues. In Ireland, we have mapped combined gross mean un-risked prospective resources of 6.4 billion barrels oil equivalent and 1.5 tcf gas across our six licences.  We estimate our Inishkea prospect, which lies close to the producing Corrib gas field, has a 1 in 3 chance of success.

Compare all the above with our current market capitalisation and the value case for Europa, in our view, speaks for itself.  Our job is to realise the huge potential of our asset base, while at all times managing risk.  Drilling offshore Ireland alongside heavyweight partners is how we intend to achieve this.  With favourable terms under negotiation with a major operator that could lead to the funding of up to three high impact wells, we are confident we are on course to offer our shareholders the series of potential liquidity events.

Simon Oddie

Chairman

11 April 2019

Operational review

Offshore Ireland: Exploration

Europa holds six licences in Atlantic Ireland which, in aggregate, cover an area of over 4,985 km², include six play types in three basins and contain over 30 prospects and leads that potentially hold gross mean un-risked prospective resources of 6.4 billion barrels oil equivalent and 1.5 tcf gas. 

To date six prospects have been de-risked to drill-ready status including the Inishkea gas project in LO 16/20 in the Slyne Basin; Kiely East in FEL 2/13 and Edgeworth in FEL 1/17 in the South Porcupine Basin.  Inishkea is regarded by Europa as its flagship project due to its location in a play that has been proven by the Corrib gas field, its potential to be larger than Corrib, its proximity to existing processing facilities, and Ireland’s need for more gas supplies.

Activity during the half year period has been centred on securing farm-out partners to fund drilling activity. As announced in November 2018, Europa is currently negotiating farm-in agreements with a major international oil and gas company in respect of LO 16/20, FEL 1/17 and FEL 3/13.  A final investment decision from the major’s head office is awaited.  Subject to a positive outcome, the terms agreed would see Europa hold material interests in up to three wells.  To ensure wells can be drilled at the earliest opportunity, Europa has submitted applications for three site surveys in summer 2019 for the Inishkea, Kiely East and Edgeworth prospects. Subject to successful conclusion of this work and finalisation of funding, all three prospects could be drilled from 2020 onwards.

Drilling activity in the region is due to recommence in summer 2019 with a well targeting the Iolar prospect in FEL 3/18 in the Porcupine basin operated by CNOOC International, together with its partner ExxonMobil.  Exploration success at Iolar potentially de-risks 1 billion boe in five prospects in Europa's Porcupine portfolio including Kiely East (280 mmboe) and Edgeworth (225 mmboe).

Slyne Basin: LO 16/20

LO 16/20 is located next to the producing Corrib gas field in the Slyne Basin and contains the Corrib North gas discovery. LO 16/20 represents low risk exploration in a proven gas play.  

During the half year, technical work was undertaken to further de-risk Inishkea and calculate prospective resources for Inishkea.  This work included Pre-Stack Depth Migration (“PSDM”) reprocessing of 770 km² of 3D seismic data over Inishkea and the Corrib gas field. The geophysical interpretation arising from the PSDM data has been benchmarked and calibrated against newly released Ocean Bottom Cable 3D seismic data over the Corrib gas field.  Post period end in February 2019, the Company announced prospective resources for Inishkea, the details of which are provided in the table below:

Licence	Prospect	Play	Gross Un-risked Prospective Resources (billion cubic feet)
			Low	Best	High	Mean
LO 16/20	Inishkea	Triassic gas	244	968	3,606	1,528

Inishkea is a large fault bounded Triassic structure that lies 11km to the northwest of the Corrib gas field. The reservoir is Triassic age sandstone sourced from the underlying Carboniferous. The trap is provided by a combination of Triassic Uilleann Halite top seal and fault seal. Engineering studies demonstrate strong positive economics for a range of porosity outcomes, including outcomes significantly poorer than Corrib. Europa’s view of porosity at Inishkea is supported by velocity data from new PSDM data. Given the Company’s confidence in trap and reservoir quality and the nearby producing Corrib gas field, the Company has assigned a one in three chance of success to Inishkea based on in-house technical work.

A drilling location for a first exploration well on Inishkea (18/20-H) has been identified. There is a robust, low risk tie on seismic data for the Corrib Sandstone reservoir back to the Corrib gas field.  Europa intends to acquire a site survey in summer 2019 (subject to regulatory consent), which would enable a well to be drilled at this location in 2020 (subject to funding and regulatory consents). Operations planning for both the site survey and engineering design of the exploration is in progress.

The Corrib North structure containing the 18/20-7 gas discovery well drilled by Shell in 2010 may be upgraded to contingent resources pending further engineering evaluation. Based on the interpretation of historic 3D and 2D seismic, discovered Gas Initially In Place (“GIIP”) is provided in the table below:

Licence	Prospect	Play	Gross discovered GIIP (billion cubic feet)
			Low	Best	High
LO 16/20	Corrib North	Triassic gas	5	41	208

South Porcupine Basin: FELs 1/17, 2/13 and 3/13

Europa operates three licences in the South Porcupine Basin, FELs 1/17, 2/13 and 3/13.  An aggregate of 4.3 billion barrels of oil equivalent (boe) of gross mean un-risked prospective resources have been estimated across nine priority prospects on these three licences based on the results of reprocessed PSDM 3D seismic data originally acquired in 2013. These include firm drilling targets Edgeworth in FEL 1/17, Wilde in 3/13 and Kiely East in 2/13.  The table below summarises the Gross Un-risked Prospective Resources (“GMUPR”) across selected prospects in FELs 1/17, 2/13 and 3/13 in the South Porcupine Basin:        

Licence	Prospect	Play	Gross Un-risked Prospective Resources
			mmboe*
			Low	Best	High	Mean
FEL 1/17	Ervine	Pre-rift	63	159	363	192
FEL 1/17	Edgeworth	Pre-rift	49	156	476	225
FEL 1/17	Egerton	Syn-rift	59	148	301	167
FEL 3/13	Beckett	mid-Cretaceous Fan	111	758	4229	1719
FEL 3/13	Shaw+	mid-Cretaceous Fan	20	196	1726	747
FEL 3/13	Wilde	Early Cretaceous Fan	45	241	1082	462
FEL 2/13	Kiely East +	Pre-rift	52	187	612	280
FEL 2/13	Kiely West +	Pre-rift	23	123	534	225
FEL 2/13	Kilroy+	Cret. Slope Apron	37	177	734	312
Total						4,329

*million barrels of oil equivalent. The hydrocarbon system is considered an oil play and mmboe is used to take account of associated gas.  However, due to the significant uncertainties in the available geological information, there is a possibility of gas charge.

+ on block

Following the completion of the PSDM programme and release of the new prospect inventory, Europa opened a virtual data room for prospective farminees for its three operated South Porcupine licences in July 2018. As mentioned previously, Europa is negotiating with a major international oil and gas company in respect of FEL 1/17 and FEL 3/13. 

The 2019 CNOOC International well in FEL 3/18 will drill the Iolar prospect, which the Company understands is a pre-rift play. Europa has five pre-rift prospects in FEL 2/13 and FEL 1/17 with combined GMUPR of just over 1 billion boe. If Iolar is successful there may be positive technical and commercial read across resulting in a de-risking of Europa’s prospects.

South Porcupine Basin: LO 16/19

LO 16/19 is located on the west side of the South Porcupine basin.  A farm-out agreement for LO 16/19 was secured with Cairn Energy in April 2017, as a result of which Cairn was assigned operatorship of and acquired a 70% interest in the licence in exchange for funding a work programme worth up to US$6 million.  This included the acquisition of 3D seismic in 2017.  The final processed dataset was delivered in Q4 2018 and a prospect inventory based on this is expected to be published in 2019.

Padraig Basin: LO 16/22

LO16/22 is located in the Padraig Basin on the eastern margin of the Rockall Trough. Padraig is a remnant Jurassic basin. Based on Europa’s restoration of the conjugate margin prior to the spreading of the Atlantic seafloor, the most relevant analogue is the conjugate margin play offshore Newfoundland in the Flemish Pass basin and which hosts the 300 million barrel Bay du Nord oil discovery.

Structures of significant size have been mapped on 2D seismic acquired in 1998, along with multiple leads in Triassic gas, pre-rift and syn-rift hydrocarbon plays. Gross mean un-risked indicative resources are estimated to be approximately 500 million boe for the syn-rift oil play and potentially 5tcf of GIIP in the Triassic gas play. Work is underway to mature the leads, which lie in water depths ranging from 800m to 2,000m, to prospect status.

UK - Onshore Production

East Midlands: West Firsby; Crosby Warren; Whisby-4

Europa produces from three oilfields in the East Midlands: West Firsby (100% working interest); Crosby Warren (100%); and the Whisby-4 well (65%).  During the six months to 31 January 2019, an aggregate 90 boepd were recovered from the three fields (H1 2018: 97 boepd) with all the oil transported by road to the Immingham refinery.

During the period, initiatives were undertaken to manage the decline at the West Firsby oil field including a workover of the WF6 well utilising a drain hole jetting technique for the first-time onshore UK.  The workover involved jetting sixteen 90m length drain holes. Having previously produced zero oil, WF6 is currently producing 6 bopd net to Europa. 

UK - Development

East Midlands: PEDL180 (Wressle); PEDL182 (Broughton North)

The Wressle conventional oil field on PEDL180 was discovered by the Wressle-1 well in 2014.  During production testing in 2015, Wressle-1 flowed oil and gas at a combined flowrate of 710 boepd from three separate reservoirs: the Ashover Grit, the Wingfield Flags and the Penistone Flags.  In September 2016, a Competent Person’s Report provided independent estimates of Reserves and Contingent and Prospective oil and gas resources for the Wressle discovery of 2.15 million stock tank barrels classified as discovered (2P+2C). Reservoir engineering analyses indicate an initial production flow rate of 500 bopd gross from the Ashover Grit interval at Wressle. At this rate, Europa's existing production would be over 200 bopd and would generate significant cash flows for the Company. 

Following the Planning Inspectorate’s decision to reject an appeal by the partnership against North Lincolnshire Council Planning Committee’s decision to refuse planning permission for the Wressle oil development in January 2018, the operator Egdon Resources submitted a new planning application for the development of Wressle in July 2018. Despite being recommended for approval by North Lincolnshire Council’s planning officers, the application was rejected by the Council’s Planning Committee in November 2018.  

In January 2019, an application to extend the existing planning consent for the Wressle site by a year, was approved by the Planning Inspector on appeal after the original application for an extension was refused by North Lincolnshire Council’s Planning Committee in August 2018.  This was despite having been recommended for approval by the Council’s Planning Officer.  The extension to the existing planning consent to 24 January 2020 is expected to allow sufficient time for the Planning Inspector to determine an appeal against the Council’s rejection of the Wressle development application.  Following this, post period end, the operator submitted the relevant appeal documentation.  A draft bespoke timetable for the appeal process, which will involve a planning inquiry, was issued on 13 February by the Planning Inspectorate.

Europa has a 30% working interest in licence PEDL180 in the East Midlands which holds the Wressle oil discovery, alongside Egdon (operator, 30%), Union Jack Oil (27.5%), and Humber Oil & Gas Limited (12.5%).

The Broughton North exploration prospect on PEDL182 lies adjacent and north of PEDL180.  In 1984, a well drilled by BP discovered oil at Broughton.  In the CPR, Broughton North was assigned gross mean un-risked prospective resources of 0.6 million boe and a geological chance of success of 50%.

UK – Exploration

Weald Basin: PEDL143 (Holmwood)

In September 2018, the Secretary of State for the Environment, Food and Rural Affairs, refused an application to extend the site lease. Acting on behalf of the partnership, Europa withdrew its application to extend planning permission to drill the Holmwood exploration well from the Bury Hill Wood site, which has since been re-instated.  The remaining prospectivity of PEDL143 is now being evaluated which, in addition to the established Portland sandstone reservoirs, includes the Kimmeridge Limestone, an emerging play in the Weald Basin.  On 14 March Europa announced that it was in the process of transferring operatorship to UK Oil & Gas PLC. Regulatory consent has been obtained.

East Midlands: PEDL299 (Hardstoft)

PEDL299 contains the Hardstoft oil field which was discovered in 1919 by the UK’s first ever exploration well.  Hardstoft produced 26,000 barrels of oil from Carboniferous limestone reservoirs in the 1920s. Gross 2C contingent resources of 3.1 million boe and gross 3C contingent resources of 18.5 million boe in the Hardstoft structure were identified in a CPR issued by joint venture partner Upland Resources.  The application of modern production testing and drilling methodologies could lead to commercial oil flowrates being achieved. Europa’s interest in PEDL299, which is restricted to the conventional prospectivity including Hardstoft, is 25%, alongside Upland 25% and INEOS, the operator, 50%.

Cleveland Basin: PEDL343 (Cloughton)

PEDL343 contains the Cloughton gas discovery, which was successfully drilled by Bow Valley in 1986 and flowed a small amount of gas to surface on production test from conventional Carboniferous sandstone reservoirs. Europa regards Cloughton as a gas appraisal opportunity with the critical challenge being to obtain commercial flowrates from future production testing operations.  Europa holds a 35% interest in PEDL343 alongside Arenite 15%, Third Energy 20% (operator), Egdon Resources 17.5% and Petrichor Energy 12.5%.

East Midlands: PEDL181

PEDL181 is exposed to the hydrocarbon potential of the Humber basin. The licence has technical synergy with the adjacent PEDL334 which was awarded to an Egdon Resources-led group in the 14th Round for the purpose of conventional and unconventional exploration.

New Ventures

As announced in January 2019, Europa is in the final phase of discussions with The National Office of Hydrocarbons and Mines (‘ONHYM’) regarding securing a petroleum agreement in Morocco. The Company continues to evaluate new ventures within its established areas of interest which include greenfield exploration and brownfield re-development projects in North Africa, Western Europe, and Central Europe.

Financials

Average daily H1 2019 production was 90 boepd compared to 97 boepd in H1 2018 following:

• Natural decline at three production sites
• Incremental production added from the West Firsby 6 workover starting in January 2019 which is currently producing 6 bopd net to Europa

There was a 14% increase in average realised oil price to US$67.7 per barrel (H1 2018: US$59.2). Foreign exchange movements positively impacted revenues by 5% as US Dollar sales converted to Sterling at US$1.29 (H1 2018: US$1.35)

Conclusion and Outlook

Our objective is to drill-up our portfolio of high impact prospects in Atlantic Ireland at the earliest opportunity.  Several workstreams are being advanced concurrently to ensure we are in a position to achieve this, including securing partners for our South Porcupine and Slyne Basin licences, and undertaking site surveys in summer 2019 for our drill-ready prospects Inishkea in the Slyne Basin, and Kiely East and Edgeworth in the South Porcupine Basin.  Much progress has been made.  Notably with an offer received from the NW European division of a major international oil and gas company to farm-in to three licences.  Subject to final negotiation and an investment decision awaited from the major’s head office, Europa will be funded for up to three high impact wells including one targeting 1.5 tcf of gas at Inishkea next to the Corrib field.  Furthermore, this is not all high-risk wildcat exploration.  We rank Inishkea as having a one in three chance of success. We also note that other companies are active in the South Porcupine: CNOOC International intend to drill the Iolar prospect in summer 2019 and ENI have applied for consent to acquire a site survey on Dunquin South in summer 2019. These are exciting times for Atlantic Ireland.

Outside Ireland, we will continue to support the operator’s efforts to gain approval to develop the Wressle oil field.  If successful, Wressle will more than double our existing production to over 200 bopd which, at current oil prices, would generate a valuable revenue stream for the Company.  Elsewhere we are close to finalising a petroleum agreement in Morocco in line with our strategy to diversify our portfolio, and where we can deploy the same technical skillset and expertise..

Hugh Mackay

CEO

11 April 2019

Qualified Person Review

This release has been reviewed by Hugh Mackay, Chief Executive of Europa, who is a petroleum geologist with over 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.

Licence Interests Table

Country	Area	Licence	Field/ Prospect	Operator	Equity	Status
UK	East Midlands	DL003	West Firsby	Europa	100%	Production
		DL001	Crosby Warren	Europa	100%	Production
		PL199/215	Whisby-4	BPEL	65%	Production
		PEDL180	Wressle	Egdon	30%	Development
		PEDL181		Europa	50%	Exploration
		PEDL182	North Broughton	Egdon	30%	Exploration
		PEDL299	Hardstoft	INEOS	25%	Exploration
		PEDL343	Cloughton	Third Energy	35%	Exploration
	Weald	PEDL143	Holmwood	UKOG	20%	Exploration
Ireland	South Porcupine	FEL 2/13	Doyle: Aw/Ac/Ae/B/C, Kilroy, Keane, Kiely East, Kiely West , Lead F	Europa	100%	Exploration
		FEL 3/13	Beckett, Wilde Shaw	Europa	100%	Exploration
		FEL 1/17	Ervine, Edgeworth, Egerton,PR3	Europa	100%	Exploration
		LO 16/19	2 leads	Cairn	30%	Exploration
	Slyne	LO 16/20	Corrib North discovery, Inishkea	Europa	100%	Exploration
	Padraig	LO 16/22	6 leads	Europa	100%	Exploration

Financials

Unaudited consolidated statement of comprehensive income

	6 months to 31 January 2019	6 months to 31 January 2018	Year to 31 July 2018 (audited)
	£000	£000	£000
Revenue	859	778	1,634
Cost of sales	(855)	(670)	(1,365)
Impairment of producing fields	-	-	(142)
Exploration write-off	-	(46)	(1,289)
	------	------	------
Gross profit	4	62	(1,162)
Administrative expenses	(375)	(429)	(967)
Finance income	27	6	10
Finance expense	(93)	(136)	(171)
	------	------	------
Loss before taxation	(437)	(497)	(2,290)
Taxation credit/(charge)	-	168	(341)
	------	------	------
Total comprehensive loss for the period attributed to the equity shareholders of the parent	(437)	(329)	(2,631)
	======	======	======
	Pence per share	Pence per  share	Pence per share
Earnings per share (EPS) attributable to the equity shareholders of the parent Attributable to the equity shareholders of the
Basic and diluted EPS (note 4)	(0.13)p	(0.11)p	(0.87)p

Unaudited consolidated statement of financial position

	31 January 2019	31 January 2018	31 July 2018 (audited)
	£000	£000	£000
Assets
Non-current assets
Intangible assets	6,759	6,534	5,959
Property, plant and equipment	621	813	668
Deferred tax asset	-	508	-
	------	------	------
Total non-current assets	7,380	7,855	6,627
	------	------	------
Current assets
Inventories	26	19	20
Trade and other receivables	300	512	471
Cash and cash equivalents	4,435	2,306	1,771
	------	------	------
	4,761	2,837	2,262
	------	------	------
Total assets	12,141	10,692	8,889
	======	======	======
Liabilities
Current liabilities
Trade and other payables	(918)	(883)	(1,299)
	------	------	------
Total current liabilities	(918)	(883)	(1,299)
	------	------	------
Non-current liabilities
Long-term provisions	(2,826)	(2,652)	(2,735)
	------	------	------
Total non-current liabilities	(2,826)	(2,652)	(2,735)
	------	------	------
Total liabilities	(3,744)	(3,535)	(4,034)
	------	------	------
Net assets	8,397	7,157	4,855
	======	======	======
Capital and reserves attributable to equity holders of the parent
Share capital (note 3)	4,447	3,014	3,014
Share premium	21,009	18,481	18,481
Merger reserve	2,868	2,868	2,868
Retained deficit	(19,927)	(17,206)	(19,508)
	------	------	------
Total equity	8,397	7,157	4,855
	======	======	======

Unaudited consolidated statement of changes in equity

	Share capital	Share premium	Merger reserve	Retained deficit	Total equity
	£000	£000	£000	£000	£000
Unaudited
Balance at 1 August 2017	3,014	18,481	2,868	(16,888)	7,475
Total comprehensive loss for the period	-	-	-	(329)	(329)
Share based payments	-	-	-	11	11
	------	------	------	------	------
Balance at 31 January 2018	3,014	18,481	2,868	(17,206)	7,157
	======	======	======	======	======
Audited
Balance at 1 August 2017	3,014	18,481	2,868	(16,888)	7,475
Loss for the year attributable to the equity shareholders of the parent	-	-	-	(2,631)	(2,631)
Share based payments	-	-	-	11	11
	------	------	------	------	------
Balance at 31 July 2018	3,014	18,481	2,868	(19,508)	4,855
	======	======	======	======	======
Unaudited
Balance at 1 August 2018	3,014	18,481	2,868	(19,508)	4,855
Total comprehensive loss for the period	-	-	-	(437)	(437)
Issue of share capital	1,433	2,546	-	-	3,979
Issue of share options	-	(18)	-	18	-
Share based payments	-	-	-	-	-
	------	------	------	------	------
Balance at 31 January 2019	4,447	21,009	2,868	(19,927)	8,397
	======	======	======	======	======

Unaudited consolidated statement of cash flows

	6 months to 31 January 2019	6 months to 31 January 2018	Year to 31 July 2018 (audited)
	£000	£000	£000
Cash flows (used in)/from operating activities
Loss after taxation	(437)	(329)	(2,631)
Adjustments for:
Share based payments	-	11	11
Depreciation	47	69	72
Impairment of producing field	-	-	142
Exploration write-off	-	46	1,289
Finance income	(27)	(6)	(10)
Finance expense	93	136	171
Taxation charge/(credit)	-	(168)	341
Decrease in trade and other receivables	22	101	69
Increase in inventories	(6)	(5)	(6)
(Decrease)/increase in trade and other payables	(35)	161	73
	------	------	------
Net cash (used in)/from operating activities	(343)	16	(479)
	======	======	======
Cash flows used in investing activities
Purchase of intangibles	(1,002)	(1,081)	(1,336)
Buy back of part interest in licence	-	(160)	-
Interest received	5	6	10
	------	------	------
Net cash used in investing activities	(997)	(1,235)	(1,326)
	======	======	======
Cash flows from/(used in) financing activities
Proceeds from the issue of share capital	3,961	-	-
Increase/(decrease) in payables relating to share capital issue costs	14	(16)	(16)
Option based equity movement on share issue	18	-	-
Finance costs	(2)	(2)	(3)
	------	------	------
Net cash from/(used in) financing activities	3,991	(18)	(19)
	======	======	======
Net increase/(decrease) in cash and cash equivalents	2,651	(1,237)	(1,824)
Exchange gain/ (loss) on cash and cash equivalents	13	(48)	4
Cash and cash equivalents at beginning of period	1,771	3,591	3,591
	------	------	------
Cash and cash equivalents at end of period	4,435	2,306	1,771
	======	======	======

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 11 April 2019.

The consolidated interim financial information for the period 1 August 2018 to 31 January 2019 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 2017 to 31 January 2018 and the audited financial year to 31 July 2018.

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 2018.

The comparatives for the full year ended 31 July 2018 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.

Given the current cash balance and cash inflow from the Group’s producing assets, the Directors have concluded, at the time of approving the consolidated interim financial information, that there is a reasonable expectation, based on the Group’s cash flow forecasts, that the Group can continue in operational existence for the foreseeable future, which is deemed to be at least 12 months from the date of signing the consolidated financial information. Accordingly, they continue to adopt the going concern basis in preparing the consolidated interim financial information.

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 2019.

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

	6 months to 31 January 2019	6 months to 31 January 2018	Year to 31 July 2018 (audited)
Allotted, called up and fully paid ordinary shares of 1p	Shares	Shares	Shares
Start of period	301,388,379	301,388,379	301,388,379
Issued in the period	143,303,220	-	-
	----------------	--------------	--------------
End of period	444,691,599	301,388,379	301,388,379
	==========	=========	=========
	£000	£000	£000
Start of period	3,014	3,014	3,014
Issued in the period	1,433	-	-
	------	------	------
End of period	4,447	3,014	3,014
	======	======	=======
Ordinary shares issued On 10 December 2018 at 6p issue price	Number of shares	Raised net of costs £000	Nominal value £000
Placing	133,333,338	3,684	1,333
Open offer	9,969,882	277	100
	------	------	------
	143,303,220	3,961	1,433
	======	======	======

4          Earnings per share (EPS)

Basic EPS has been calculated on the loss after taxation divided by the weighted average number of shares in issue during the period. Diluted EPS 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 3.51p which was below the exercise price of all 25,637,898 outstanding share options (H1 2018: 5.74p which was below the exercise price of all 25,164,440 outstanding share options).

The calculation of the basic and diluted earnings per share is based on the following:

	6 months to 31 January 2019	6 months to 31 January 2018	Year to 31 July 2018 (audited)
	£000	£000	£000
Losses
Loss for the period attributable to the equity shareholders of the parent	(437)	(329)	(2,631)
	======	======	======
Number of shares
Weighted average number of ordinary shares for the purposes of basic and diluted EPS	342,665,937	301,388,379	301,388,379
	======	======	======

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

• Wressle planning appeal submitted to Planning Inspectorate on 5 February 2019 and draft bespoke programme issued by the Inspectorate on 13 February
• Gross un-risked prospective resources at the Inishkea gas prospect in LO 16/20 confirmed as 1.5 tcf with one in three chance of success (RNS 26 February 2019)
• Transferred operatorship of PEDL143 to UK Oil & Gas PLC as announced on14 March 2019