TIDMEOG

RNS Number : 1741I

Europa Oil & Gas (Holdings) PLC

13 April 2022

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

13 April 2022

Europa Oil & Gas (Holdings) plc

("Europa" or "the Company")

Interim Results

Europa Oil & Gas (Holdings) plc, the AIM traded UK, Morocco and Ireland focused oil and gas exploration, development, and production company, announces its interim results for the six-month period ending 31 January 2022.

Financial performance

-- Strongest interim financial performance since H1 2014 with significant revenue and profit as a result of asset performance and a strengthening oil price

   --    Revenue GBP2.2 million (H1 2021: GBP0.5 million) 
   --    Pre-tax profit of GBP0.7 million (H1 2021: pre-tax loss GBP0.7 million) 

-- Net cash from operating activities GBP0.9 million (H1 2021: net cash used in operating activities GBP0.2 million)

   --    Unrestricted cash balance at 31 January 2022: GBP0.6 million (31 July 2021: GBP0.6 million) 

Operational Highlights

Onshore UK - Wressle oilfield moving from strength to strength and new possibilities for West Firsby

Wressle Oil Field

-- Wressle exceeded initial gross projections of 500 barrels of oil per day ("bopd") in August, which increased to instantaneous flow rates in excess of 884 bopd and 480,000 cubic feet ("Mcf") of gas by September following successful proppant squeeze and coiled tubing operations. This more than doubled Europa's total net oil production to 208 bopd during H1 and provided a major boost to revenues against a backdrop of rising oil prices.

-- ERCE Equipoise Ltd ("ERCE"), an independent energy consulting group, concluded from analysis of downhole pressure data that higher rates of up to 1,543 bopd can be realised if the facilities constraints on gas production can be alleviated.

-- Further resources in the Wingfield Flags and Penistone Flags reservoirs are being reviewed for development and have the potential to increase net reserves.

West Firsby Oil Field

-- CausewayGT and geothermal project partner Baker Hughes identified Europa's West Firsby oil field in the Midlands as a suitable candidate for developing a closed-loop geothermal system.

-- Future potential for West Firsby to continue delivering revenue and for additional well stock to be repurposed to generate emission-free geothermal energy is in line with the Company's ESG strategy.

Offshore Morocco - high-impact exploration opportunity

-- The farm out initiative of the Inzegane Offshore permit located in the Agadir Basin was formally launched in August. Europa has a 75% interest in Inzegane and operatorship of the License covering an area of 11,228 sq. km

o Inzegane represents a high-impact exploration opportunity in a highly underexplored area of the world - complementing Europa's strategy of building a balanced portfolio of assets.

o Recent evaluation identified a significant volume of unrisked recoverable resources, in excess of 1 billion barrels (oil equivalent), in the top five ranked prospects alone.

o Morocco offers a highly attractive investment opportunity with excellent fiscal terms. Several major and mid-cap companies already hold acreage there, including ENI, Hunt, Genel and ConocoPhillips.

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

o Farmout initiative is continuing on Licence FEL 4/19 which holds the flagship 1.5 tcf Inishkea prospect adjacent to existing infrastructure at the producing Corrib gas field.

Post period

-- Exercise of rights by DNO North Sea (UK) Limited to terminate the Sale and Purchase Agreement for acquisition by Europa of Irish exploration licence FEL 3/19.

-- Successfully raised gross proceeds of GBP7.02m, approved by shareholders at the General Meeting on 25 March.

-- Proposed acquisition of a 25% interest in the Serenity discovery in the North Sea as part of the Company's strategy to build a balanced portfolio of assets.

Simon Oddie, CEO said :

"We are delighted to bring you our outstanding financial results for the first half, which saw revenue quadruple to GBP2.2 million and a swing back to profitability from recent years.

Europa's positive H1 performance was driven by excellent production result at our Wressle oil field in North Lincolnshire, which saw our average daily production more than double compared to H1 2021 and coupled with elevated oil prices, which are now exceeding US$100 a barrel.

With the raising of GBP7.02 million and the p roposed acquisition of a 25% interest in the Serenity discovery in the UK North Sea post reporting period, we have now also put in place the third leg of the business, the acquisition of a near-term appraisal and development opportunity. The year is shaping up to be transformational for both our diversified energy portfolio and our financial position."

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

 
 Simon Oddie                   Europa                mail@europaoil.com 
  Murray Johnson                Europa 
 Christopher Raggett /                               +44 (0) 20 7220 
  Simon Hicks                  finnCap Ltd            0500 
 Oonagh Reidy / Ana Ribeiro    St Brides Partners    +44 (0) 20 7236 
  / Max Bennett                 Ltd                   1177 
 

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

"It has been a very eventful and truly game changing time for Europa. Our standout performer in the UK portfolio - Wressle - delivered and exceeded all expectations and the period also saw our ESG strategy gain momentum with the West Frisby oil field identified as a possible site for a closed loop geothermal project. The most material and transformational event came post period end with the raising of GBP7.02 million to fund the farm-in for 25% of North Sea block 13/23c which includes the Serenity oil discovery. This has the combined benefits of balancing our portfolio and offering the potential for significant short term value upside to Europa. We are now delivering on our stated strategy of developing a balanced portfolio of multi-stage hydrocarbon assets encompassing production, development, and exploration.

Wressle's outstanding production performance during H1 saw average daily output more than double to over 200 bopd (net) - quadrupling revenues to GBP2.2 million, compared to H1 2021, amid a surging oil price environment. The average realised oil price increased by 75%, -compared to H1 2021, to US$77.84 per barrel during the first half. Our net cash figure was also positive versus a year ago. Also, there is further upside potential available for our standout asset as flagged by a report conducted by ERCE Equipoise Ltd ("ERCE"), an independent energy consulting group, which highlighted significant upside potential in production to 1,543bopd - provided certain conditions are met. The operator is currently working on satisfying these conditions to enable further increased production.

The farm out initiative of our Inezgane Offshore permit in offshore Morocco launched during the period also paves the way for additional growth vis a vis a high-impact exploration opportunity in a highly underexplored area. This is a high potential exploration licence where we have already mapped unrisked prospective oil resources in excess of 1 billion barrels.

Finally, on behalf of the Board I would like to thank the management, employees and consultants for their hard work over the course of the reporting period and beyond. I also want to thank our shareholders for their continued support during the period and look forward to updating the market on further developments during this exciting period for the Company."

Mr Brian O'Cathain (non-executive Chairman)

13 April 2022

Operational review

Financials

Average daily H1 2022 production was 208 boepd compared to 86 boepd in H1 2021. There was a 75% increase in average realised oil price to US$77.84 per barrel (H1 2021: US$44.45). Foreign exchange movements had a negligible impact on revenues as US Dollar sales converted to Sterling at US$1.35 (H1 2020: US$1.34).

   --    Revenue was GBP2.2 million (H1 2021: GBP0.5 million) 

-- Net cash received from operating activities was GBP0.9 million (H1 2021: cash spent GBP0.2 million)

   --    The Group's unrestricted cash balance as at 31 January 2022 was GBP0.6 million 

Based upon the Group cashflow forecasts, the Directors have concluded that there is a reasonable expectation that the Group will be able to 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. Further comments on going concern are included in note 1.

Conclusion and Outlook

Our first half financial performance was solid owing to outstanding operations in the period. A quadrupling of revenue compared to H1 2021, a dramatic turnaround in our profitability from a loss of GBP0.7m to a profit of GBP0.7m, our net cash position closing higher compared to that as at January 2021- thanks, in the main, to our 30% interest in Wressle oil field in North Lincolnshire. The asset has delivered beyond our expectations with still further upside potential ahead.

Elsewhere, we have advanced our ESG strategy with the West Firsby legacy oilfield in the West Midlands, which is being assessed as a suitable site for closed loop geothermal energy by Baker Hughes and CausewayGT. If successful, this could have positive implications for our other ageing oil wells and the renewable energy sector more broadly. We expect further momentum as studies progress in H2.

In offshore Ireland, we are continuing our technical studies and farmout initiative on our flagship Irish project - FEL 4/19, which holds the 1.5 tcf Inishkea prospect located in the Corrib Basin. We remain enthusiastic for this asset given Ireland's heavy dependence on the Corrib gas field for its gas supply and rising concerns around energy security. This, coupled with increasing gas prices, means the market fundamentals are becoming even more favourable.

We continue to advance our activity in offshore Morocco and look forward to reporting on progress ahead. With oil prices currently over US$100 a barrel, as a result of the recent geopolitical situation and the banning of Russian oil and gas by several countries - the focus for UK and European governments is now on sourcing alternative sources of fossil fuels, including a strong preference to increase domestic supply across EU and the UK.

The post period acquisition of a 25% interest in Serenity is in line with Europa's previously stated intention to acquire an appraisal asset, adding to its existing producing and high impact exploration assets and thus creating a more balanced asset portfolio for investors. Serenity is expected to be drilled during 2022 at a gross cost of GBP14 million. Europa will pay 46.25% of the appraisal well cost, equating to a 1.85 to 1 carry. The carry is capped at a gross well cost of GBP15 million, of which the Company's interest will be GBP6.94 million. Thereafter, each party will fund its interests proportionally. It is strategically located near existing infrastructure in the North Sea, however the appraisal well could provide sufficient recoverable volumes for a standalone development.

Europa is now well positioned to capitalise on its diversified and high potential energy portfolio which is an effective balance of exploration, appraisal and production with substantial additional development potential.

Simon Oddie

CEO

13 April 2022

Qualified Person Review

This release has been reviewed by Alastair Stuart, engineering advisor to Europa, who is a petroleum engineer with over 35 years' experience and a member of the Society of Petroleum Engineers and 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/               Operator       Equity   Status 
                                          Prospect 
           Slyne Basin       FEL 4/19    Inishkea, Corrib     Europa           100%   Exploration 
                                          North 
          ----------------  ----------  -------------------  -------------  -------  ------------ 
           South Porcupine   FEL 1/17    Ervine, Edgeworth,   Europa           100%   Exploration 
 Ireland                                  Egerton 
          ----------------  ----------  -------------------  -------------  -------  ------------ 
 UK        East Midlands     DL 003      West Firsby          Europa           100%   Production 
          ----------------  ----------  -------------------  -------------  -------  ------------ 
                             DL 001      Crosby Warren        Europa           100%   Production 
          ----------------  ----------  -------------------  -------------  -------  ------------ 
                             PL199/215   Whisby-4             BPEL              65%   Production 
                              199/215 
                            ----------  -------------------  -------------  -------  ------------ 
                             PEDL180     Wressle              Egdon             30%   Development 
                            ----------  -------------------  -------------  -------  ------------ 
                             PEDL181                          Europa            50%   Exploration 
                            ----------  -------------------  -------------  -------  ------------ 
                             PEDL182     Broughton North      Egdon             30%   Exploration 
                            ----------  -------------------  -------------  -------  ------------ 
                             PEDL299     Hardstoft            Ineos             25%   Appraisal 
                            ----------  -------------------  -------------  -------  ------------ 
                             PEDL343     Cloughton            Third Energy      35%   Appraisal 
          ----------------  ----------  -------------------  -------------  -------  ------------ 
 Morocco   Agadir Basin      Inezgane    Falcon & Turtle      Europa            75%   Exploration 
--------  ----------------  ----------  -------------------  -------------  -------  ------------ 
 

Financials

Unaudited condensed consolidated statement of comprehensive income

 
                                                                                                                                                    Year to 
                                                                                                                                                    31 July 
                                                                                                                                                       2021 
                                                        6 months                                       6 months 
                                                   to 31 January                                  to 31 January 
                                                            2022                                           2021                                   (audited) 
                                                          GBP000                                         GBP000                    GBP000 
Continuing 
operations 
Revenue                                                    2,191                                            516                                       1,372 
-----------------  ---------------------------------------------  ---------------------------------------------  ------------------------------------------ 
Cost of sales                                            (1,246)                                          (607)                                     (1,249) 
Impairment of 
 producing fields                                              -                                           (51)                                           - 
-----------------  ---------------------------------------------  ---------------------------------------------  ------------------------------------------ 
Total cost of 
 sales                                                   (1,246)                                          (658)                                     (1,249) 
                          -------------------------------------          -------------------------------------        ------------------------------------- 
Gross 
 profit/(loss)                                               945                                          (142)                                         123 
 
Exploration write 
 back/(write off) 
 (note 3)                                                    360                                              -                                        (12) 
Administrative 
 expenses                                                  (463)                                          (417)                                       (717) 
Finance income                                                20                                              3                                           3 
Finance expense                                            (119)                                          (131)                                       (242) 
                           -------------------------------------          -------------------------------------       ------------------------------------- 
Profit/(loss) 
 before taxation                                             743                                          (687)                                       (845) 
Taxation (note 5)                                              -                                            127                                         127 
                           -------------------------------------          -------------------------------------       ------------------------------------- 
Profit/(loss) for 
 the period                                                  743                                          (560)                                       (718) 
Other 
comprehensive 
income 
Items that will 
not be 
reclassified 
to profit/(loss), 
net of tax 
Loss on 
 investment 
 revaluation                                                (17)                                           (10)                                         (2) 
                           -------------------------------------          -------------------------------------       ------------------------------------- 
Total 
 comprehensive 
 income/(loss) 
 for the period 
 attributed to 
 the 
 equity 
 shareholders of 
 the parent                             726                                                               (570)                                       (720) 
                                        ========================                       ========================                    ======================== 
 
 
 
                                                       Pence per                                      Pence per                                   Pence per 
                                                           share                                          share                                       share 
Earnings per 
share (EPS) 
attributable 
to the equity 
shareholders of 
the 
parent 
 
Attributable to 
the equity 
shareholders 
of the 
Basic EPS (note 
 4)                                    0.13p                                         (0.13)p                                      (0.15)p 
Diluted EPS (note 
 4)                                    0.13p                                            -                                            - 
 

Unaudited condensed consolidated statement of financial position

 
 
                                                                                                                                                           31 July 
                                                                                                                                                              2021 
                                                               31 January                                   31 January 
                                                                     2022                                         2021                                   (audited) 
                                                                   GBP000                                       GBP000                                      GBP000 
Assets 
Non-current assets 
Intangible assets (note 6)                                          2,960                     5,391                                                          6,438 
Property, plant and 
 equipment (note 
 7)                                                                 4,006                      358                                                             369 
Restricted cash                                    -                                           233                                                               - 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
Total non-current assets                                            6,966                     5,982                                                          6,807 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
Current assets 
Investments                                                            25                      35                                           42 
Inventories                                                            50                                           29                      23 
Trade and other receivables                                           822                                          480                     522 
Restricted cash                                   238                                                                -                     230 
Cash and cash equivalents                                             624                                          269                     641 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
                                                                    1,759                                          813                                       1,458 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
 
Total assets                                                        8,725                                        6,795                                       8,265 
                                                     ====================                         ====================                    ======================== 
 
Liabilities 
Current liabilities 
Borrowing (note 8)                                                   (10)                                        (231)                                        (10) 
Trade and other payables                                          (1,177)                                      (1,218)                                     (1,556) 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
Total current liabilities                                         (1,187)                                      (1,449)                                     (1,566) 
                                    -------------------------------------        -------------------------------------       ------------------------------------- 
Non-current liabilities 
Borrowings (note 8)                                                  (35)                                         (44)                                        (40) 
Trade and other payables                                             (11)                                         (23)                                        (17) 
Long-term provisions (note 
 9)                                                               (3,510)                                      (3,278)                                     (3,393) 
                                       ----------------------------------        ----------------------------------          ------------------------------------- 
Total non-current 
 liabilities                                                      (3,556)                                      (3,345)                                     (3,450) 
                                       ----------------------------------        ----------------------------------          ------------------------------------- 
Total liabilities                                                 (4,743)                                      (4,794)                                     (5,016) 
                                      -----------------------------------         -----------------------------------        ------------------------------------- 
Net assets                                                          3,982                                        2,001                                       3,249 
                                                     ====================                         ====================                    ======================== 
Capital and reserves 
attributable 
to equity holders of the 
parent 
Share capital                                                       5,665                                        4,447                                       5,665 
Share premium                                                      21,157                                       21,010                                      21,157 
Merger reserve                                                      2,868                                        2,868                                       2,868 
Retained deficit                                                 (25,708)                                     (26,324)                                    (26,441) 
                                       ----------------------------------        ----------------------------------          ------------------------------------- 
Total equity                                                        3,982                                        2,001                                       3,249 
                                                    =====================                     ========================                     ======================= 
 
 
 
 
 
 
 
 
 
 

Unaudited condensed consolidated statement of changes in equity

 
                                              Share                                Share                               Merger                             Retained 
                                            capital                              premium                              reserve                              deficit                         Total equity 
                                             GBP000                               GBP000                               GBP000                               GBP000                               GBP000 
 
  Unaudited 
Balance at 1 
 August 
 2021                                         5,665                               21,157                                2,868                             (26,441)                                3,249 
Comprehensive 
income 
for the period 
Profit for the 
 period 
 attributable 
 to the 
 equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                  743                                  743 
Other 
 comprehensive 
 loss 
 attributable 
 to the equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                 (17)                                 (17) 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
Total 
 comprehensive 
 income for 
 the period                                       -                                    -                                    -                                  726                                  726 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
Contributions 
by 
and 
distributions 
to owners 
Share-based 
 payments                                         -                                    -                                    -                                    7                                    7 
                 ----------------------------------   ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------ 
Total 
 transactions 
 with owners                                      -                                    -                                    -                                    7                                    7 
                -----------------------------------  -----------------------------------  -----------------------------------  -----------------------------------  ----------------------------------- 
Balance at 31 
 January 
 2022                                         5,665                               21,157                                2,868                             (25,708)                                3,982 
                            =======================              =======================              =======================              =======================              ======================= 
 
 
 
  Unaudited 
Balance at 1 
 August 
 2020                                         4,447                               21,010                                2,868                             (25,838)                                2,487 
Loss for the 
 period 
 attributable 
 to the 
 equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                (560)                                (560) 
Other 
 comprehensive 
 loss 
 attributable 
 to the equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                 (10)                                 (10) 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
Total 
 comprehensive 
 loss for the 
 period                                           -                                    -                                    -                                (570)                                (570) 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
 
Contributions 
by 
and 
distributions 
to owners 
Share-based 
 payments                                         -                                    -                                    -                                   84                                   84 
                 ----------------------------------   ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------ 
 
Total 
 transactions 
 with owners                                      -                                    -                                    -                                   84                                   84 
                -----------------------------------  -----------------------------------  -----------------------------------  -----------------------------------  ----------------------------------- 
Balance at 31 
 January 
 2021                                         4,447                               21,010                                2,868                             (26,324)                                2,001 
                            =======================              =======================              =======================              =======================              ======================= 
 
  Audited 
Balance at 1 
 August 
 2020                                         4,447                               21,010                                2,868                             (25,838)                                2,487 
Loss for the 
 year 
 attributable 
 to the 
 equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                (718)                                (718) 
Other 
 comprehensive 
 loss 
 attributable 
 to the equity 
 shareholders 
 of the parent                                    -                                    -                                    -                                  (2)                                  (2) 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
Total 
 comprehensive 
 loss for the 
 year                                             -                                    -                                    -                                (720)                                (720) 
                  ---------------------------------    ---------------------------------     --------------------------------       ------------------------------      ------------------------------- 
Contributions 
by 
and 
distributions 
to owners 
Issue of share 
 capital                                      1,218                                  225                                    -                                    -                                1,443 
Issue of share 
 warrants                                         -                                 (78)                                    -                                   78                                    - 
Share-based 
 payments                                         -                                    -                                    -                                   39                                   39 
                 ----------------------------------   ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------ 
Total 
 transactions 
 with owners                                  1,218                                  147                                    -                                  117                                1,482 
                 ----------------------------------   ----------------------------------    ---------------------------------       ------------------------------      ------------------------------- 
Balance at 31 
 July 
 2021                                         5,665                               21,157                                2,868                             (26,441)                                3,249 
                 ==================================   ==================================   ==================================      ===============================       ============================== 
 

Unaudited condensed consolidated statement of cash flows

 
                                                                                                                                                                Year to 
                                                                                                                                                                31 July 
                                                             6 months                                    6 months 
                                                                   to                                          to                                                  2021 
                                                           31 January                                  31 January 
                                                                 2022                                        2021                                             (audited) 
                                                               GBP000                                      GBP000                                                GBP000 
Cash flows 
generated/(used in) 
operating 
activities 
Profit/(loss) after 
 taxation                                                         743                                       (560)                                                 (718) 
Adjustments for: 
    Share-based payments                                            7                                          84                                                    39 
     Depreciation                                                 627                                          67                                                   107 
     Taxation credit 
      recognised in 
      profit 
      and loss                                                      -                                       (127)                                                 (127) 
     Impairment of 
      producing fields                                              -                                          51                                                     - 
     Exploration write 
      off                                                           -                                           -                                                    12 
     Reversal of cost 
      accrual on 
      relinquishment 
      of licences                                               (360)                                           -                                                     - 
     Finance income                                              (20)                                         (3)                                                   (3) 
     Finance expense                                              119                                         131                                                   242 
     (Increase)/decrease 
      in trade and 
      other receivables                                         (300)                                          24                                                 (288) 
     Increase in 
      inventories                                                (27)                                        (17)                                                  (11) 
     Decrease/(increase) 
      in trade and 
      other payables                                               90                                         (5)                                                    85 
                                  -----------------------------------         -----------------------------------       ------------------------------------- 
Net cash generated 
 from/(used in) 
 operations                                                       879                                       (355)                                                 (662) 
Income taxes repayment 
 received                                                           -                                         127                                                   127 
                                  -----------------------------------         -----------------------------------                 ------------------------------------- 
Net cash generated 
 from/(used in) 
 operating activities                                             879                                       (228)                                                 (535) 
                                             ========================                    ========================                              ======================== 
 
Cash flows used in 
investing activities 
Purchase of property, 
 plant & equipment                                              (406)                      -                                                                          - 
Purchase of intangibles                                         (487)                                       (470)                                                 (985) 
Cash guarantee re Morocco                                           -                                         (3)                                                   (4) 
Interest received                                                   -                                           3                                                     3 
                                -------------------------------------       -------------------------------------       ----------------------------------------------- 
Net cash used in 
 investing activities                                           (893)                                       (470)                                                 (986) 
                                             ========================                    ========================                              ======================== 
Cash flows (used in)/from 
financing 
activities 
Gross proceeds from issue 
 of share 
 capital                                                            -                                           -                                                 1,583 
Costs incurred on issue 
 of share 
 capital                                                            -                                           -                                                 (140) 
Proceeds from borrowings                                            -                                         225                                                   225 
Repayment of borrowings                                           (5)                                           -                                                 (225) 
Lease liability payments                                          (7)                                        (25)                                                  (35) 
Lease liability interest 
 payments                                                         (1)                                         (2)                                                   (2) 
Finance costs                                                     (2)                                         (3)                                                   (7) 
                                -------------------------------------       -------------------------------------                -------------------------------------- 
Net cash (used in)/from 
 financing 
 activities                                                      (15)                                         195                                                 1,399 
                                             ========================                    ========================                              ======================== 
Net decrease in cash and 
 cash equivalents                                                (29)                                       (503)                                                 (122) 
 
Exchange gain/(loss) on 
 cash and 
 cash equivalents                                                  12                                           4                                                   (5) 
Cash and cash equivalents 
 at beginning 
 of period                                                        641                                         768                                                   768 
                                -------------------------------------       -------------------------------------       ------------------------------------- 
Cash and cash equivalents 
 at end 
 of period                                                        624                                         269                                                   641 
                                             ========================                    ========================                              ======================== 
 
 
 
 
 
 

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 55 Baker Street, London W1U 7EU. Europa Oil & Gas's shares are listed on the London Stock Exchange AIM market.

Basis of preparation

The Group's condensed consolidated interim financial information is presented in Pounds Sterling (GBP), which is also the functional currency of the Parent Company.

The condensed consolidated interim financial information has been approved for issue by the Board of Directors on 13April 2022.

The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information.

The condensed consolidated interim financial information for the period 1 August 2021 to 31 January 2022 is unaudited. In the opinion of the Directors the condensed consolidated 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 consolidated interim financial information incorporates unaudited comparative figures for the interim period 1 August 2020 to 31 January 2021 and the audited financial year to 31 July 2021.

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 2021.

The comparatives for the full year ended 31 July 2021 are not the Group'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.

Going concern

The Directors have prepared a cash flow forecast for the period ending 31 December 2022, which considers the continuing and forecast cash inflow from the Group's producing assets, the cash held by the Group at the half year end, less administrative expenses and planned capital expenditure. The Directors have concluded, at the time of approving the financial statements, that there is a reasonable expectation, based on the Group's cash flow forecasts, that the forecasts are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as and when they fall due. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial information.

Critical accounting estimates

The preparation of condensed consolidated interim financial information requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 1 of the Group's 2021 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

   2          Summary of significant accounting policies 

The condensed consolidated financial information has been prepared using policies based on UK adopted international accounting standards. Except as described below, the condensed consolidated financial information has been prepared using the accounting policies which were applied in the Group's statutory financial information for the year ended 31 July 2021.

(a) Accounting developments during 2021

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 31 January 2022 but did not result in any material changes to the financial statements of the Group.

(b) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted

 
 Standard              Description                Effective date 
--------------------  -------------------------  --------------- 
 IFRS 3                Reference to Conceptual    1 January 2022 
                        Framework 
 IAS 37                Onerous contracts          1 January 2022 
 IAS 16                Proceeds before intended   1 January 2022 
                        use 
 Annual improvements   Annual improvements        1 January 2022 
  2018-2020             2018-2020 Cycle 
 IAS 8                 Accounting estimates       1 January 2023 
 IAS 1                 Classification of          1 January 2023 
                        Liabilities as Current 
                        or Non-Current 
 

The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group's results or shareholders' funds.

   3          Exploration write back/(write off) 
 
                                         31 Jan 2022                          31 Jan 2021                         31 July 2021 
                                              GBP000                               GBP000                               GBP000 
Release of cost 
 accrual on 
 relinquishment 
 of licences                                     360                                    -                                    - 
Exploration 
 write-off - 
 PEDL 299 
 Hardstoft                                         -                                    -                                 (12) 
                 -----------------------------------  -----------------------------------  ----------------------------------- 
                                                 360                                    -                                 (12) 
                 ===================================  ===================================  =================================== 
 
   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 1.43p which resulted in dilution of 3,286,966 shares. The weighted number of shares for the diluted earnings per share is 569,753,951. There are a further 5,180,000 options that were non-dilutive.(H1 2020: 2.30p which was below the exercise price of all 23,453,458 outstanding share options).

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

 
                                                            6 months to                6 months to             Year to 
                                                             31 January                 31 January        31 July 2021 
                                                                   2022                       2021           (audited) 
                                                                 GBP000                     GBP000              GBP000 
Profit/(loss) 
Profit/(loss) for the period attributable 
 to the equity shareholders of the 
 parent                                                             743                      (560)               (718) 
                                                     ==================         ==================  ================== 
Number of shares 
Weighted average number of ordinary 
 shares for the purposes of basic 
 EPS                                                        566,466,985                444,691,599         494,420,476 
                                                             ==== =====                ======= ===        ============ 
                                             ===== ====================   ========================         =========== 
                                                                                                            ========== 
                                                                                                                     = 
Number of shares 
Weighted average number of ordinary 
 shares for the purposes of diluted 
 EPS                                                        569,753,951                444,691,599         494,420,476 
                                                             ==== =====                ======= ===        ============ 
                                             ===== ====================   ========================         =========== 
                                                                                                            ========== 
                                                                                                                     = 
 
   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          Intangible assets 
 
                                      31 Jan 2022                          31 Jan 2021                         31 July 2021 
                                           GBP000                               GBP000                               GBP000 
At 1 August                                 6,438                                4,965                                4,965 
Additions                                     416                                  426                                1,485 
Transfer to 
 property, 
 plant & 
 equipment                                (3,894) 
Exploration 
 write-off                                      -                                    -                                 (12) 
              -----------------------------------  -----------------------------------  ----------------------------------- 
At period 
 end                                        2,960                                5,391                                6,438 
              ===================================  ===================================  =================================== 
 

Intangible assets comprise the Group's pre-production expenditure on licence interests as follows:

 
                                        31 Jan 2022                        31 Jan 2021                       31 July 2021 
                                             GBP000                             GBP000                             GBP000 
 Ireland FEL 4/19 
  (Inishkea)                                  1,698                1,606                                            1,662 
 Morocco Inezgane                             1,037                 314                                               657 
 UK PEDL180 
  (Wressle)                                       -                3,234                                            3,893 
 UK PEDL181                                     105                 118                                               113 
 UK PEDL182 
  (Broughton North)                              34                  29                                                34 
 UK PEDL299                                       -                  12                                                 - 
 (Hardstoft) 
 UK PEDL343 
  (Cloughton)                                    86                  78                                                79 
                      -----------------------------      -----------------------------   -------------------------------- 
 Total                                        2,960                5,391                                            6,438 
                       ============================   ================================   ================================ 
 
 
 
                               31 Jan 2022                      31 Jan 2021                                  31 July 2021 
                                 GBP000                            GBP000                                          GBP000 
 Transfer to 
  Property, plant & 
  equipment 
 UK PEDL180                                   3,894                                  -                                  - 
  (Wressle) 
                      -----------------------------    -------------------------------   -------------------------------- 
 Total                                        3,894                                  -                                  - 
                       ============================   ================================   ================================ 
                                             ======                             ======                            ======= 
 
   7          Tangible assets 

Property, plant & equipment

 
                                        Furniture                        Producing                         Right of                            Total 
                                      & computers                           fields                       use assets 
                                           GBP000                           GBP000                           GBP000                           GBP000 
Cost 
At 1 August 2020                                6                           10,887                              147                           11,040 
Disposals                                     (1)                                -                             (80)                             (81) 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
At 31 July 2021                                 5                           10,887                               67                           10,959 
Transfer from 
 intangible 
 assets                                         -                            3,894                                -                            3,894 
Additions                                       -                              370                                -                              370 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
At 31 January 
 2022                                           5                           15,151                               67                           15,223 
                             ====================             ====================                =================           ====================== 
 
Depreciation, 
depletion and 
impairment 
At 1 August 2020                                3                           10,488                               73                           10,564 
Charge for year                                 1                               64                               42                              107 
Disposal                                      (1)                                -                             (80)                             (81) 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
At 31 July 2021                                 3                           10,552                               35                           10,590 
 
Charge for 
 period                                         1                              617                                9                              627 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
At 31 January 
 2022                                           4                           11,169                               44                             11,217 
                              ===================           ======================                =================               ==================== 
Net Book Value 
At 31 January 
 2022                                           1                            3,982                               23                              4,006 
                  ===============================  ===============================  ===============================    =============================== 
At 31 July 2021                                 2                              335                               32                                369 
                  ===============================  ===============================  ===============================    =============================== 
 
  Cost 
At 1 August 2020                                6                           10,887                              147                             11,040 
Disposal                                        -                                -                             (80)                               (80) 
                  -------------------------------  -------------------------------  -------------------------------  ------------------------------- 
At 31 January 
 2021                                           6                           10,887                               67                           10,960 
                              ===================           ======================                =================             ==================== 
 
Depreciation, 
depletion and 
impairment 
At 1 August 2020                                3                           10,488                               73                             10,564 
Charge for 
 period                                         1                               34                               32                                 67 
Impairment                                      -                               51                                -                                 51 
Disposal                                        -                                -                             (80)                               (80) 
                  -------------------------------  -------------------------------  -------------------------------    ------------------------------- 
At 31 January 
 2021                                           4                           10,573                               25                             10,602 
 
Net Book Value 
At 31 January 
 2021                                           2                              314                               42                                358 
                  ===============================  ===============================  ===============================    =============================== 
 
 
   8          Borrowings 
 
                           31 Jan 2022                           31 Jan 2021                                      31 July 2021 
                             GBP000                                GBP000                                               GBP000 
 Loans 
 repayable 
 in less 
 than 
 1 year 
 Director's                                      -                                   225                                     - 
 loan 
 Bounce back 
  loan                                          10                                     6                                    10 
               -----------------------------------   -----------------------------------   ----------------------------------- 
 Total short 
  term 
  borrowings                                    10                                   231                                    10 
                ==================================    ==================================     ================================= 
 
 
 Loans 
 repayable 
 in 1 to 2 
 years 
 Bounce back 
  loan                                          10                                    10                                    10 
 Loans 
 repayable 
 in 2 to 5 
 years 
 Bounce back 
  loan                                          25                                    30                                    30 
 
 Loans 
 repayable 
 in over 5 
 years 
 Bounce back                                     -                                     4                                     - 
 loan 
 
               -----------------------------------   -----------------------------------   ----------------------------------- 
 Total long 
  term 
  borrowings                                    35                                    44                                    40 
                ==================================    ==================================     ================================= 
 

In June 2020 the Group received a Bounce Back loan for GBP50,000 under the Government's Covid 19 policies. The loan is to be repaid within 6 years of drawdown but with a 12 month holiday so repayments started July 2021 and the loan will be repaid over the following 5 years. The annual rate of interest is 2.5%.

On 19th January 2021 Europa entered into a related party loan agreement with CW Ahlefeldt-Laurvig (a Group Non-Executive director and shareholder). Under this agreement, Europa Oil & Gas drew funds of GBP225,000 on 20(th) January 2021 for a term of 4 months (with the option of early repayment). The loan was unsecured and interest accrued on a daily basis at an effective interest rate of 12.57% per annum. The loan and accrued interest was fully repaid in March 2021.

   9          Long term provisions 
 
                                        31 Jan 2022                          31 Jan 2021                         31 July 2021 
                                             GBP000                               GBP000                               GBP000 
At 1 August                                   3,393                                3,163                                3,163 
Charged to the 
 statement of 
 comprehensive 
 income                                         117                                  115                                  230 
                -----------------------------------  -----------------------------------  ----------------------------------- 
At period end                                 3,510                                3,278                                3,393 
                ===================================  ===================================  =================================== 
 
   10         Post reporting date 

-- Termination of License Sale and Purchase Agreement with DNO North Sea the Frontier Exploration Licence ("FEL") located in offshore Ireland.

-- Successfully raised gross proceeds of GBP7.02m, approved by shareholders at the General Meeting on 25 March.

-- Proposed acquisition of a 25% interest in the Serenity discovery in the North Sea as part of Company strategy to build a more balanced portfolio.

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April 13, 2022 02:00 ET (06:00 GMT)

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