Europa Oil & Gas has announced its unaudited interim results for the six-month period ended 31 January 2023. 

Financial Performance

• Highest interim revenues recorded in Company's history as a result of continued excellent operational performance and a strong oil price
• Revenue £3.7 million (H1 2022: £2.2 million)
• Gross profit £1.5 million (H1 2022: £0.9 million)
• Pre-tax loss of £1.3 million (H1 2022: pre-tax profit £0.7 million) after exploration impairment charge of £1.7 million (H1 2022: impairment reversal £0.4 million)
• Net cash from operating activities £1.7 million (H1 2022: £0.9 million)
• Unrestricted cash balance at 31 January 2023: £5.1 million (31 July 2022: £1.4 million)

OPERATIONAL HIGHLIGHTS

Onshore UK - Wressle oilfield continues to exceed expectations, generating strong levels of revenues and production

• Total production net to Europa averaged 268 bopd during the H1 period, a 29% increase on H1 last year
• Wressle net production to Europa increased 55% from 134 bopd to 207 bopd as the field performed better than expected
• Wressle now the second most productive onshore UK oilfield
• The well continues to produce under natural flow with zero water cut and remains highly cash generative
• A new seismic interpretation and mapping exercise across the Wressle field has highlighted a potentially significant increase in resources from the Ashover Grit and the results of the analysis are now being incorporated into the field development plan. The intention is that the next development well will be drilled from the existing Wressle site and planning and permitting work for the well is ongoing. The well will be drilled at the earliest opportunity, subject to receipt of regulatory approval
• Ongoing work to utilise the associated gas being produced from Wressle which is expected to lead to further increases in oil production during H2 2023
• An independent technical report has been commissioned which will incorporate the new field interpretation, historical production performance data and the field development plan. The report is expected to be completed during June 2023

Offshore Ireland - Low risk / high reward infrastructure-led exploration in the proven Slyne Basin gas play

• The FEL 4/19 licence extension was granted by the Irish Government, extending the initial phase to January 2024
• Licence FEL 4/19 contains the Inishkea gas exploration prospect, estimated by ERCE, a third-party reserves auditor to hold 1.5 tcf of recoverable gas
• A farm-out process has begun which is expected to conclude by year end 2023, with the aim of bringing in a partner to assist with the drilling of the prospect
• Given the security of supply issues that Ireland faces, the Board believes that it is in the interest of Ireland that this prospect is drilled as soon as reasonably possible, especially as local existing infrastructure would make any development a low carbon intensity project

Offshore UK

Progress continues with the development of the Serenity oil discovery in the Central North Sea alongside our partner i3 Energy
Despite drilling an appraisal well in October 2022 that failed to encounter hydrocarbons, the partners believe that Serenity offers a commercially viable development opportunity with a number of potential development scenarios available given local infrastructure
A future development could result in approximately 1,000 bopd net to Europa's 25% interest

Morocco

The extension to the Initial Period of the Inezgane Licence offshore Morocco announced on 21 October 2020 came to an end in November 2022, and Europa decided not to progress to the First Extension Period

ESG

• Initiated ESG review focused on integrating the ESG principles adopted by Europa into the Company's planning and wider strategy
• Europa contributes to the Wressle Community Fund, which has been operating since early 2022 and provides funds to meet the needs of local charities and community groups. The Company and its Wressle JV partners make an annual contribution of £100,000 to the fund

Post Period

• In March 2023, the Company announced that Simon Oddie was stepping down as CEO, with Will Holland moving from his role as CFO to replace him with immediate effect
• The operator of Wressle announced that gross revenues from the field since August 2021 had reached US$35.0 million by late March 2023, representing approximately US$10.5 million net to Europa
• On 3 April 2023 Alastair Stuart, a petroleum engineer with over 30 years of experience, was appointed Chief Operating Officer and an Executive Director of the Company. Mr Stuart has been a consultant at Europa since 2012 and more recently has been intimately involved in the development of the Wressle Field
• In order to ensure that the finance function within Europa is suitably resourced, the Company has increased its existing mandate with Clifton Financial Solutions Limited. Clifton already provides accounting services to Europa and from April 2023 will also provide administrative services that would typically fall under the remit of a CFO

Will Holland, CEO of Europa, said :
"I am pleased to report my first set of interim results as CEO showing record operational numbers which resulted in Europa continuing to be in a strong financial position. These numbers were all generated whilst Simon Oddie was CEO and are a testament to the excellent job that he has done at Europa since 2018.

The Wressle oilfield's continued excellent performance has underpinned our significant growth in revenues during the period, and a number of projects are underway to enable increased oil production and gas monetisation from the field. The first phase of the gas utilisation project was completed in January 2023, whereby three microturbines were connected to provide site power which have resulted in a c. 10% increase in oil production. The second stage is the installation of a gas engine to generate 1.4 MW of electricity into a local private power network.

In addition to building on our corporate ESG framework, the cornerstone of our long-term commitment to the global energy transition, we initiated a farm-out process for our Irish offshore licence FEL 4/19. Within the licence is the extensive Inishkea gas prospect containing an estimated 1.5 tcf of gas, and we recognise the significant potential of FEL 4/19 to help alleviate Ireland's energy security concerns by providing the nation with a dependable source of gas produced with low carbon emissions.

Europa remains a highly cash generative business, and our robust financial foundations will enable us to continue to work towards optimising our existing assets in the second half of the year, whilst we also pursue potential UK offshore and onshore opportunities to add to our well-balanced portfolio and deliver further value for shareholders."