TIDMEOG
RNS Number : 3606V
Europa Oil & Gas (Holdings) PLC
14 April 2021
Europa Oil & Gas (Holdings) plc / Index: AIM / Epic: EOG /
Sector: Oil & Gas
14 April 2021
Europa Oil & Gas (Holdings) plc ("Europa" or "the
Company")
Interim Results
Europa Oil & Gas (Holdings) plc, the AIM traded Ireland,
Morocco and UK focused oil and gas exploration, development and
production company, announces its interim results for the six month
period ended 31 January 2021.
Operational highlights
Building a balanced portfolio of exploration and production
assets
Onshore UK - commencement of oil flow at Wressle set to
transform Europa's financial profile
-- Successful and safe completion of operations to recomplete
the Wressle-1 well and reperforate the Ashover Grit reservoir
interval
o Well currently on continuous 24-hour test production
o Wressle projected to more than double Europa's net production
to over 200boepd
o Production at Wressle expected to be highly profitable at
today's US$60 plus per barrel oil prices - compares favourably to
estimated break-even oil price of US$17.6 per barrel
-- 86boepd was produced from Europa's three existing UK onshore
fields during the period - compared to 90boepd for H1 2020
Offshore Ireland - lower risk / very high reward
infrastructure-led exploration in proven gas play
-- Awaiting regulatory approval of acquisition of 100% interest
in Frontier Exploration Licence ('FEL') 3/19, which includes the
1.2 tcf Edge prospect and lies close to the 1tcf producing Corrib
gas field
-- FEL 3/19 complements Europa's nearby FEL 4/19 which holds the 1.5 tcf Inishkea prospect
-- Preparing to launch farmout of FELs 3/19 and 4/19, Europa's
strategic position in the Slyne Basin
Offshore Morocco - large Inezgane licence in the Agadir Basin
equivalent to c. 50 UKCS North Sea blocks
-- Mapped over 20 prospects and leads which combined have the
potential to hold over one billion barrels of unrisked oil
resources - follows reprocessing and interpreting of historic 3D
seismic data
-- Prospects mapped in the Lower Cretaceous fan sand play, a prolific producer in West Africa
-- Work ongoing to de-risk prospects ahead of farm-out launch to
secure partner(s) to drill wells
-- One year extension to initial phase of the licence to
November 2022 granted to allow for time lost as a result of
COVID-19 and to enable technical work programme to be completed
Financial performance
-- Revenue GBP0.5 million (H1 2020: GBP0.8 million)
-- Pre-tax loss of GBP0.6 million (H1 2020: pre-tax loss GBP3.5
million including write-offs taken following relinquishment of
Irish licences)
-- Net cash used in operating activities GBP0.2 million (H1 2020: GBP0.5 million)
-- Cash balance at 31 January 2021: GBP0.3 million (31 July 2020: GBP0.8million)
-- Appointment of Simon Oddie as CEO on a permanent basis
-- Senior Independent non-executive Director Mr Brian O'Cathain appointed non-executive Chairman
-- Board salaries and fees reduced by 50% in response to COVID-19 pandemic
-- Director's Loan of GBP225,000 drawn down in January
Post reporting period events
-- GBP1.44 million was raised (net of fees) via Placing and
Broker Option to fund work programmes:
o evaluating late-stage appraisal/development projects to
rebalance existing portfolio of production and exploration
assets
o maximising recovery from existing onshore UK fields including
potential workovers on WF2 and WF9 wells at the West Firsby
field
o continuing technical analysis / seismic reprocessing on
Inezgane Licence ahead of securing a farm-out partner
-- The Director's loan taken out in January 2021 from CW
Ahlefeldt-Laurvig and accrued interest was fully repaid in March
2021
-- All salaries and fees re-instated to levels prior to cuts
Simon Oddie, CEO of Europa, said : "The first half saw activity
across all three jurisdictions in which Europa operates in and
shareholders can expect more of the same in the second half of the
year: onshore UK, test production on the Wressle field commenced at
the end of January; offshore Ireland, further preparations for the
relaunch of the farm-out of the Company's Slyne Basin licence
position, although receipt of regulatory approval for the
acquisition of FEL 3/19 is still awaited; offshore Morocco,
continuation of the technical work programme that is underway to
de-risk the new prospect inventory.
"As a result of the post period end fundraise and in addition to
the activity above, the second half will also see new work streams
advanced. These include the evaluation of cost-effective low risk
opportunities to increase UK onshore production at Europa's
existing fields as well as the identification and pursuit of new
ventures, specifically in the late stage, appraisal/development
category. With oil prices trading above US$60 per barrel and
Wressle projected to scale up net production to over 200boepd,
management is focused on maintaining the momentum behind the
Company in the months ahead, as we look to build a cash generative
oil and gas company, one that offers shareholders exposure to
multiple value creating opportunities, while minimising capital
risk."
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
Frank Buhagiar / Megan St Brides Partners +44 (0) 20 7236
Dennison 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
Being the last day of the six-month period covered by the half
year report, 31 January is a key date in Europa's corporate
calendar. This year, the date assumed added importance as 31
January 2021 marked the commencement of oil flow at the Wressle Oil
Field ('Wressle') in North Lincolnshire. Expected to more than
double Europa's existing production to over 200boepd, and with oil
prices now trading at over US$60 per barrel, a significant premium
to the c. US$18 per barrel required for the field to breakeven,
Wressle represents an important step towards transforming the
Company's production and financial profile.
Increasing UK onshore production to build up a low risk,
production-based platform with which to grow the Company further is
just one part of Europa's dual-focused strategy. The other is to
expose shareholders to significant value creating opportunities.
Here too progress has been made. Offshore Ireland, where our focus
is on the proven gas play in the Slyne Basin that is home to the
producing Corrib field, work has continued to prepare for a
relaunch of the farmout of our licence position whilst awaiting
regulatory approval for the acquisition of FEL 3/19. Offshore
Morocco, where Europa holds a 75% interest in the Inezgane licence
in the Agadir Basin, technical work continues to de-risk the 1
billion plus barrels of unrisked resources we have identified to
date. Outside our existing portfolio, we continue to evaluate
potential new ventures in line with our strategy to add
appraisal/development projects that would complement our existing
production and exploration assets.
Together with the post period end GBP1.44 million fundraise (net
of fees) , Europa is well placed to maintain the momentum
established by the commencement of oil flow at Wressle and in the
process make further progress towards achieving its corporate
objectives despite the ongoing global pandemic and lockdown.
Onshore UK
The standout onshore UK activity during the period was centered
around the establishment of the free-flow of oil at Wressle on
licences PEDL180 & 182. This was achieved following the
completion of operations to reperforate the Wressle #1 well and the
subsequent successful communication with the Ashover Grit reservoir
interval. The Well is currently undergoing test production and
clean-up. Once on full production, Wressle # 1 is projected to
produce at an initial gross rate of 500bopd. At this rate, Europa's
30% interest in the field will translate into 150bopd net to the
Company, which, when combined with the 86bopd produced by our three
existing fields in the East Midlands, will increase overall
production to well above 200boepd. Together with oil prices trading
at over US$60 per barrel, Wressle is anticipated to result in a
sustainable step-up in the Company's net production and
revenues.
The commencement of oil flow at Wressle does not represent the
sum of development ambitions for our existing onshore UK portfolio.
Scope remains to increase production across our fields,
specifically by improving recovery rates and targeting proven
intervals. With this in mind, a portion of the funds raised in the
recent placing will be deployed to further evaluate the potential
to undertake workovers on wells at the West Firsby field. Any
development activity undertaken is likely to be relatively low cost
and low risk.
The same can be said for future development work at Wressle
where a number of follow-up opportunities have already been
identified on PEDLs 180 & 182, including producing reserves in
the Penistone Flags interval and potentially drilling at Broughton
North, a prospect which has been assigned gross mean un-risked
prospective resources of 0.6 million boe and a geological chance of
success of 50%. Our existing onshore UK assets therefore offer
considerable run room to build on our success at Wressle and grow
production and revenues further.
Offshore Ireland
Last year Europa's offshore Ireland portfolio underwent a
decisive pivot away from early-stage oil exploration in unproven
basins to infrastructure-led gas exploration in the proven Slyne
Basin. In line with this, we announced the acquisition, for a
nominal sum, of a 100% interest in FEL 3/19. This holds the 1.2 tcf
Edge prospect and is located close to both the producing Corrib gas
field and our own 1.5 tcf Inishkea prospect on FEL 4/19. The
acquisition of FEL 3/19 is awaiting regulatory sign-off and subject
to receipt of this, Europa will have 100% interests in the only two
known 1 tcf plus gas prospects that lie close to Corrib and its
production and processing facilities. We regard the profile for gas
exploration on our Slyne basin licences as being lower risk as the
play is proven, potentially lower cost in terms of development as a
result of its proximity to existing infrastructure and very high
reward thanks to 2.7tcf of gas resources to go for. We hope and
expect that this attractive gas potential, in close proximity to
the existing Corrib production facilities, will appeal to potential
partners when the farm-out is relaunched on receipt of regulatory
approval of the FEL 3/19 acquisition.
Securing a potential partner for our offshore Ireland licences
would promise to kickstart high impact development activity which
in turn would provide exposure to a potentially significant value
creating event for shareholders in the event of drilling
success.
Offshore Morocco
Our Inezgane licence offshore Morocco also has significant value
creating potential. Since a 75% interest in the licence was awarded
to Europa in September 2019, technical work, involving the
reprocessing and interpreting of historic 3D seismic data, has been
undertaken. This has been focused on identifying and evaluating
sizeable prospects in the Lower Cretaceous play, a prolific
producer in West Africa. To date, we have mapped over 20 prospects
and leads, which, in aggregate, have the potential to hold in
excess of one billion barrels of unrisked oil resources. The
forward plan for the licence is to continue to de-risk the prospect
inventory before launching a farm-out to secure one or more
partners to drill wells. As with offshore Ireland, success with the
drillbit in Morocco would be a major event for shareholders.
Board
In August 2020, Simon Oddie was appointed Chief Executive
Officer of the Company on a permanent basis. In line with best
corporate governance practice, I took on Simon's role as
non-executive Chairman having previously held the position of
senior non-executive director.
Conclusions
Thanks to the commencement of oil flow at Wressle, the first
step has been taken on the roadmap to transform Europa into an oil
and gas company that generates both material production-based
revenues and also multiple and significant value-creating
opportunities. Together with higher oil prices and the proceeds of
the recent fundraise, we are in a strong position to focus on the
next steps on the roadmap. These include the evaluation of the
potential to increase production from our UK onshore assets, the
completion of the ongoing technical work programme offshore
Morocco, and the pursuit of appraisal/development new ventures to
complement the existing production and exploration assets. Our aim
is to ensure that Europa holds a balanced portfolio of projects
covering the full oil and gas cycle.
With a growing production base and an exploration model centred
around first proving up the technical case before bringing in
partners, our focus is to participate in potentially high reward
activity without putting the Company's balance sheet at risk. This
is the Board's vision for Europa, and I look forward to providing
further updates on progress made in the second half.
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, which has been set
against the backdrop of the ongoing pandemic. That so much has been
achieved during such a challenging period for society as a whole,
is testament to the calibre and professionalism of the team we have
in place and I commend all for their efforts.
Mr Brian O'Cathain (non-executive Chairman)
14 April 2021
Operational review
UK Production - East Midlands
Europa produces oil from three UK onshore fields: West Firsby;
Crosby Warren; and Whisby-4. During the six months ended 31 January
2021, an average of 86boepd net to Europa were recovered from the
three fields. This compares to 90boepd produced in H1 2020. All
three fields are in decline, however, as part of the Company's
active management of its production base, an evaluation of the
potential to improve recovery rates at a number of wells on the
fields is underway. This includes potential workovers on wells WF2
and WF9 at the West Firsby field.
UK Development - Wressle Oil Field
During the week commencing 4 January 2021, the workover rig and
associated services and equipment were successfully mobilised to
the Wressle site in North Lincolnshire and operations to recomplete
the Wressle#1 well and reperforate the Ashover Grit reservoir
interval commenced.
Following the completion of the above operations and successful
communication with the Ashover Grit reservoir interval, on 1
February 2021 the Company announced that commencement of free-flow
of oil had been achieved at Wressle. The well has since been placed
on continuous 24-hour test production as it undergoes the normal
clean-up phase and as it is carefully brought on-stream. In line
with the field development plan, the well is projected to achieve a
gross rate of 500bopd, which would more than double Europa's
existing UK onshore production to over 200bopd. Requiring a
breakeven oil price of US$17.6 per barrel, production at Wressle is
expected to be highly profitable at today's US$60 plus per barrel
oil prices.
Oil produced from Wressle is being transported by road tanker to
the Phillips 66 Humber refinery and sold under the operator's
existing oil sales contract.
Wressle was discovered by the Wressle#1 well in 2014. During
testing at that time, a total of 710 barrels of oil equivalent per
day were recovered 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). There is additional development potential
including Broughton North, a low risk exploration prospect lying on
the footwall side of a fault, adjacent to the historic Broughton-B1
discovery made by BP in 1984 which the CPR assigned gross mean
un-risked prospective resources of 0.6 million boe and a geological
chance of success of 49%. In addition, further development of the
Wressle field, including producing additional reserves existing in
the Penistone Flags formation, is expected in the future.
Europa holds a 30% working interest in licences PEDL180 and 182
which hold Wressle and Broughton, alongside Egdon Resources
(operator, 30%), and Union Jack Oil (40%).
Exploration: Offshore Ireland
The Company's focus offshore Ireland is on the proven gas play
in the Slyne Basin which is home to the producing Corrib field, a
key supplier of gas to Ireland's domestic market. Europa has a 100%
interest in FEL 4/19 which holds the 1.5 tcf Inishkea gas prospect
that lies close to Corrib and the associated production and
processing facilities. In June 2020, the Company announced the
acquisition of a 100% interest in FEL 3/19 from DNO. FEL 3/19 holds
the 1.2 tcf Edge prospect and lies close to Corrib and Europa's FEL
4/19.
The acquisition of FEL 3/19 is subject to regulatory sign-off
and, subject to receipt of this, the addition of the licence to its
portfolio will result in Europa holding the only known 1tcf plus
gas prospects in the Slyne Basin. With existing production and
processing facilities at Corrib, Europa views exploration in the
proven Slyne Basin as infrastructure-led, lower risk, and
potentially lower cost in terms of development when compared to the
unproven basins elsewhere offshore Ireland.
The forward plan for Europa's licences in the Slyne is to launch
a farm-out to secure a partner or partners with a view to advancing
the licences towards drilling activity. The Company intends to
launch the farm-out whilst regulatory approval is awaited for the
acquisition of FEL 3/19.
Europa also holds one licence in the South Porcupine Basin,
having applied to relinquish two other licences.
Exploration: Offshore Morocco
Europa holds a 75% interest in and operatorship of the Inezgane
Offshore licence in the Agadir Basin. The remaining 25% interest in
Inezgane is held by the Moroccan regulator, ONHYM (Office National
des Hydrocarbures et des Mines). Inezgane covers an area of 11,228
sq km, equivalent to approximately 50 UKCS North Sea blocks. A
number of oil and gas companies are currently active in this area
of Morocco, notably Shell, ENI, Repsol, Hunt, Chariot, SDX, Sound,
Schlumberger and Genel.
The primary target for Europa is the Lower Cretaceous fan sand
play, a prolific play in West Africa that is highly under-explored
offshore Morocco with only three out of the 10 wells drilled in
deep water Morocco to date having penetrated a complete Lower
Cretaceous section. Europa has identified all the key elements of
source (including the world class Cenomanian-Turonian source rock),
reservoir and seal within the Inezgane licence.
Technical work on the licence has been centred on reprocessing
and interpreting historic 3D seismic data. To date the Company has
mapped over 20 prospects and leads, which, in aggregate, have the
potential to hold in excess of one billion barrels of unrisked oil
resources. The prospects have stacked reservoir potential and
include a wide range of structural styles including for example
4-way dip closure. In addition, examples of shallow gas anomalies
have been seen on seismic data which is a positive indication of a
working petroleum system operating in the basin. Technical work is
being carried out to de-risk the new prospect inventory further
after which a farm-out will be launched to secure one or more
partners to drill wells.
The Inezgane Permit is of 8-years duration comprising three
phases of which the Initial Phase of the licence comprises 2-years.
The Initial Phase includes 3D seismic reprocessing as well as other
technical studies. At the end of the Initial Phase, Europa has the
option to commit to drilling an exploration well in the Second
Phase of the licence or to relinquish the licence. In October 2020,
ONHYM granted the Company a one-year extension to the initial phase
of the Inezgane Exploration Permit to November 2022. The one-year
extension was granted for the time lost as a result of the COVID-19
global pandemic and will enable Europa to complete its ongoing
technical work programme.
Financials
Average daily H1 2021 production was 86 boepd compared to 90
boepd in H1 2020.
There was a 25% decrease in average realised oil price to
US$44.5 per barrel (H1 2020: US$61.4). Foreign exchange movements
also had a negative impact on revenues as US Dollar sales converted
to Sterling at US$1.33 (H1 2020: US$1.28).
-- Revenue was GBP0.5 million (H1 2020: GBP0.8 million).
-- Cost of sales was GBP0.7 million (H1 2020: GBP0.7 million).
-- The Company continues to keep a tight rein on costs with
administrative expenses of GBP0.4 million during the first half (H1
2020: GBP0.5 million). During the period, members of the Board and
employees of the Company agreed to take salary cuts of up to 50% in
response to the COVID-19 pandemic and market volatility.
-- Net cash spent on operating activities was GBP0.2 million (H1
2020: cash spent GBP0.5 million).
-- The Group's cash balance as at 31 January 2021 was GBP0.3 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
The commencement of oil flow at Wressle, the extension to the
Initial Phase of the Inezgane permit and the GBP1.44 million
fundraise (net of fees) post period end, provide a strong
foundation upon which to build on in the second half of the year.
While testing operations are ongoing, Wressle is still expected to
make a positive contribution to Europa's full year net production.
The licence extension is expected to enable technical work to
de-risk the prospect inventory offshore Morocco to be completed and
a farm-out to be launched. The GBP1.44 million raised (net of fees)
will fund the evaluation of recovery improvement initiatives
onshore UK and the pursuit of late-stage appraisal/development
projects that would complement Europa's existing production and
exploration projects. The goal is to build Europa into a full cycle
oil and gas company with a balanced and diversified portfolio which
generates both material revenues from production in stable
jurisdictions as well as a pipeline of value-creating opportunities
via high impact exploration activity.
Simon Oddie
CEO
14 April 2021
Qualified Person Review
This release has been reviewed by Rowland Thomas, geophysical
advisor to Europa, who is a geophysicist with over 40 years'
experience in petroleum exploration and a member of the Society of
Exploration Geophysicists, European Association of Geoscientists
and Engineers and the Petroleum Exploration Society of Great
Britain, 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
South Porcupine FEL 1/17 Ervine, Edgeworth, Europa 100% Exploration
Egerton
---------------- ----------- ------------------- ------------- ------- -------------------
Slyne Basin FEL 4/19 Inishkea, Corrib Europa 100% Exploration
North
---------------- ----------- ------------------- ------------- ------- -------------------
Ireland FEL 3/19 Edge Europa 100% Exploration
---------------- ----------- ------------------- ------------- ------- -------------------
UK East Midlands DL 003 West Firsby Europa 100% Production
---------------- ----------- ------------------- ------------- ------- -------------------
DL 001 Crosby Warren Europa 100% Production
---------------- ----------- ------------------- ------------- ------- -------------------
PL 199/215 Whisby-4 BPEL 65% Production
----------- ------------------- ------------- ------- -------------------
PEDL180 Wressle Egdon 30% Development
----------- ------------------- ------------- ------- -------------------
PEDL181 Europa 50% Exploration
----------- ------------------- ------------- ------- -------------------
PEDL182 Broughton North Egdon 30% Exploration
----------- ------------------- ------------- ------- -------------------
PEDL299 Hardstoft Ineos 25% Field rejuvenation
----------- ------------------- ------------- ------- -------------------
PEDL343 Cloughton Third Energy 35% Appraisal
---------------- ----------- ------------------- ------------- ------- -------------------
Morocco Agadir Basin Inezgane Falcon & Turtle Europa 75% Exploration
-------- ---------------- ----------- ------------------- ------------- ------- -------------------
Financials
Unaudited consolidated statement of comprehensive income
Year to
31 July
2020
6 months 6 months
to 31 January to 31 January
2021 2020 (restated) (audited)
GBP000 GBP000 GBP000
Revenue 516 778 1,244
------------------- --------------------------------------------- --------------------------------------------- ------------------------------------------
Cost of sales (607) (703) (1,438)
Impairment of
producing fields (51) - (160)
------------------- --------------------------------------------- --------------------------------------------- ------------------------------------------
Total cost of sales (658) (703) (1,598)
------------------------------------- ------------------------------------- -------------------------------------
Gross(loss)/profit (142) 75 (354)
Exploration write
off - (3,005) (4,004)
Administrative
expenses (417) (456) (823)
Finance income 3 5 7
Finance expense (131) (130) (266)
------------------------------------- ------------------------------------- -------------------------------------
Loss before
taxation (687) (3,511) (5,440)
Taxation (note 5) 127 - -
------------------------------------- ------------------------------------- -------------------------------------
Loss for the period (560) (3,511) (5,440)
Other comprehensive
income
Items that will not
be reclassified
to profit/(loss)
Loss on investment
revaluation (10) (66) (197)
------------------------------------- ------------------------------------- -------------------------------------
Total comprehensive
loss for the
period attributed
to the equity
shareholders of
the parent (570) (3,577) (5,637)
======================== ======================== ========================
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 and diluted
EPS (note 4) (0.13)p (0.79)p (1.22)p
Unaudited consolidated statement of financial position
31 July
31 January
2020 2020
31 January
2021 (restated) (audited)
GBP000 GBP000 GBP000
Assets
Non-current
assets
Intangible
assets (note
6) 5,391 5,439 4,965
Property,
plant and
equipment 358 789 476
Restricted
cash 233 - -
------------------------------------- ------------------------------------- -------------------------------------
Total
non-current
assets 5,982 6,228 5,441
------------------------------------- ------------------------------------- -------------------------------------
Current
assets
Investments 35 175 44
Inventories 29 27 12
Trade and
other
receivables 480 357 234
Restricted
cash - 251 245
Cash and cash
equivalents 269 1,489 768
---------------------------------- ---------------------------------- -------------------------------------
813 2,299 1,303
--------------------------------- ---------------------------------- -------------------------------------
Total assets 6,795 8,527 6,744
==================== ==================== ========================
Liabilities
Current
liabilities
Loans (note
7) (231) - (2)
Trade and
other
payables (1,218) (862) (1,013)
---------------------------------- ---------------------------------- -------------------------------------
Total current
liabilities (1,449) (862) (1,015)
---------------------------------- ---------------------------------- -------------------------------------
Non-current
liabilities
Loans (note
7) (44) - (48)
Trade and
other
payables (23) (81) (31)
Long-term
provisions (3,278) (3,040) (3,163)
---------------------------------- ---------------------------------- -------------------------------------
Total
non-current
liabilities (3,345) (3,121) (3,242)
---------------------------------- ---------------------------------- -------------------------------------
Total
liabilities (4,794) (3,983) (4,257)
----------------------------------- ----------------------------------- -------------------------------------
Net assets 2,001 4,544 2,487
==================== ==================== ========================
Capital and
reserves
attributable
to equity
holders of
the parent
Share capital 4,447 4,447 4,447
Share premium 21,010 21,010 21,010
Merger
reserve 2,868 2,868 2,868
Retained
deficit (26,324) (23,781) (25,838)
---------------------------------- ---------------------------------- -------------------------------------
Total equity 2,001 4,544 2,487
===================== ======================== ========================
Unaudited consolidated statement of changes in equit y
Share Share Merger Retained
capital premium reserve deficit Total equity
GBP000 GBP000 GBP000 GBP000 GBP000
Unaudited
Balance at 1
August
2020 4,447 21,010 2,868 (25,838) 2,487
Comprehensive
loss
for the year
Loss for the
year
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
contributions
by and
distributions
to owners - - - 84 84
----------------------------------- ----------------------------------- ----------------------------------- ----------------------------------- -----------------------------------
Balance at 31
January
2021 4,447 21,010 2,868 (26,324) 2,001
======================= ======================= ======================= ======================= =======================
Audited
Balance at 1
August
2019 4,447 21,010 2,868 (20,204) 8,121
Loss for the
year
attributable
to the
equity
shareholders
of the parent - - - (5,440) (5,440)
Other
comprehensive
loss
attributable
to the equity
shareholders
of the parent - - - (197) (197)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Total
comprehensive
loss for the
year - - - (5,637) (5,637)
--------------------------------- --------------------------------- -------------------------------- ------------------------------ -------------------------------
Contributions
by
and
distributions
to owners
Share-based
payments - - - 3 3
---------------------------------- ---------------------------------- ---------------------------------- --------------------------------- ------------------------------
Total
contributions
by and
distributions
to owners - - - 3 3
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Balance at 31
July
2020 4,447 21,010 2,868 (25,838) 2,487
================================== ================================== ================================== =============================== ==============================
Unaudited
Balance at 1
August
2019 4,447 21,010 2,868 (20,204) 8,121
Total
comprehensive
loss for the
period - - - (3,511) (3,511)
Other
comprehensive
loss
attributable
to the equity
shareholders
of the parent - - - (66) (66)
---------------------------------- ---------------------------------- --------------------------------- ------------------------------ -------------------------------
Restated
balance
at 31 January
2020 4,447 21,010 2,868 (23,781) 4,544
======================= ======================= ======================= ======================= =======================
Unaudited consolidated statement of cash flows
Year to
6 months
to 31 July
6 months 31 January
to 2020 2020
31 January
2021 (restated) (audited)
GBP000 GBP000 GBP000
Cash flows used in
operating activities
Loss after taxation (560) (3,511) (5,440)
Adjustments for:
Share-based payments 84 - 3
Depreciation 67 83 186
Taxation credit (127) - -
Impairment of
producing fields 51 - 160
Exploration write
off - 3,005 4,004
Finance income (3) (5) (7)
Finance expense 131 130 266
Decrease/(increase)
in trade and
other receivables 24 (58) 72
(Increase)/decrease
in inventories (17) (8) 7
Decrease in trade
and other payables (5) (105) (95)
----------------------------------- ----------------------------------- --------------------------------
Net cash used in
operations (355) (469) (844)
Income taxes repayment
received 127 - -
----------------------------------- ----------------------------------- -------------------------------------
Net cash used in
operating activities (228) (469) (844)
======================== ======================== ========================
Cash flows used in
investing activities
Purchase of property,
plant & equipment - (99) (100)
Purchase of intangibles (470) (790) (1,148)
Cash guarantee re Morocco (3) - (1)
Sale of part interest in
licence
- associated costs - - (12)
Interest received 3 5 7
------------------------------------- ------------------------------------- --------------------------------
Net cash used in
investing activities (470) (884) (1,254)
======================== ======================== ========================
Cash flows from/(used in)
financing
activities
Proceeds from borrowings 225 - 50
Lease liability payments (25) (28) (73)
Lease liability interest
payments (2) (4) (3)
Finance costs (3) (4) (1)
------------------------------------- ------------------------------------- --------------------------------
Net cash from/(used in)
financing
activities 195 (36) (27)
======================== ======================== ========================
Net decrease in cash and
cash equivalents (503) (1,389) (2,125)
Exchange gain/(loss) on
cash and
cash equivalents 4 (27) (12)
Cash and cash equivalents
at beginning
of period 768 2,905 2,905
------------------------------------- ------------------------------------- --------------------------------
Cash and cash equivalents
at end
of period 269 1,489 768
======================== ======================== ========================
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.
The Group's consolidated interim financial information is
presented in Pounds Sterling (GBP), which is also the functional
currency of the parent Company.
The consolidated interim financial information has been approved
for issue by the Board of Directors on 14 April 2021.
The consolidated interim financial information for the period 1
August 2020 to 31 January 2021 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 2019 to 31
January 2020 and the audited financial year to 31 July 2020.
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 2020.
The comparatives for the full year ended 31 July 2020 are not
the Company's full statutory accounts for that year. A copy of the
statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors' report on those accounts was
unqualified and did not contain a statement under section 498 (2) -
(3) of the Companies Act 2006.
The Directors have prepared a cash flow forecast for the period
ending 31 December 2021, 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 consolidated interim
financial information. The critical assumptions in reaching that
conclusion are Wressle production reaches the projected gross
production rate of 500 boepd and a farmout of the Inezgane licence
is achieved.
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
2021.
3 Restatement of January 2020 figures
In adopting IFRS16 Leases at August 2019 and for the January
2020 interim financial information, the Group recognised assets and
liabilities for 2 leases that were subsequently deemed to be exempt
from the accounting standard requirements and hence were treated as
exempt in the annual accounts at 31 July 2020 and subsequently. The
31 January 2020 comparatives have been restated so the leases have
been treated in the manner they were at 31 July 2020 and 31 January
2021. The effect of the change of treatment is:
31 Jan 2020
Originally 31 Jan 2020 31 January
stated Adjustments 2020 restated
GBP000 GBP000 GBP000
Loss for the period (3,509) (2) (3,511)
=================================== =================================== ===================================
Non-current assets 6,335 (107) 6,228
Current assets 2,282 17 2,299
Current liabilities (901) 39 (862)
Non-current liabilities (3,170) 49 (3,121)
----------------------------------- ----------------------------------- -----------------------------------
Net assets 4,546 (2) 4,544
=================================== =================================== ===================================
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 1.15p which
was below the exercise price of all 25,730,000 outstanding share
options (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 2020
2021 2020 (audited)
GBP000 GBP000 GBP000
Losses
Loss for the period attributable
to the equity shareholders of the
parent (560) (3,511) (5,440)
================== ================== ==================
Number of shares
Weighted average number of ordinary
shares for the purposes of basic
and diluted EPS 444,691,599 444,691,599 444,691,599
==== ===== ======= === ============
===== ==================== ======================== ===========
==========
=
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.
During the 6 month period to January 2021, the Group received a
cash refund arising from R&D tax credits worth GBP127k (Jan 20:
GBPnil).
6 Intangible assets
31 Jan 2021 31 Jan 2020 31 July 2020
GBP000 GBP000 GBP000
At 1 August 4,965 7,818 7,818
Additions 426 626 1,151
Exploration
write-off - (3,005) (4,004)
----------------------------------- ----------------------------------- -----------------------------------
At 31 July 5,391 5,439 4,965
=================================== =================================== ===================================
Intangible assets comprise the Group's pre-production
expenditure on licence interests as follows:
31 Jan 2021 31 Jan 2020 31 July 2020
GBP000 GBP000 GBP000
Ireland FEL 1/17 - 796 -
Ireland FEL 4/19
(Inishkea) 1,606 1,363 1,482
Morocco Inezgane 314 104 299
UK PEDL180
(Wressle) 3,234 2,954 2,947
UK PEDL181 118 103 118
UK PEDL182
(Broughton North) 29 29 29
UK PEDL299
(Hardstoft) 12 12 12
UK PEDL343
(Cloughton) 78 78 78
----------------------------- -------------------------------- --------------------------------
Total 5,391 5,439 4,965
============================ ================================ ================================
31 Jan 2021 31 Jan 2020 31 July 2020
GBP000 GBP000 GBP000
Exploration
write-off
Ireland FEL 2/13 - 1,387 1,445
Ireland FEL 3/13 - 1,284 1,343
Ireland FEL 1/17 - - 845
Ireland LO 16/19 - 94 94
Ireland LO 16/22 - 240 277
----------------------------------- ----------------------------------- -----------------------------------
Total - 3,005 4,004
================================== ================================== =================================
7 Borrowings
31 Jan 2021 31 Jan 2020 31 July 2020
GBP000 GBP000 GBP000
Loans
repayable
in less
than 1
year
Director's 225 - -
loan
Bounce back
loan 6 - 2
----------------------------------- ----------------------------------- -----------------------------------
Total short
term
borrowings 231 - 2
================================== ================================== =================================
Loans
repayable
in 1 to 2
years
Bounce back
loan 10 - 10
Loans
repayable
in 2 to 5
years
Bounce back
loan 30 - 30
Loans
repayable
in over 5
years
Bounce back
loan 4 - 8
----------------------------------- ----------------------------------- -----------------------------------
Total long
term
borrowings 44 - 48
================================== ================================== =================================
On 19th January 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.
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 will start in June 2021 and will be repaid over the
following 5 years. The annual rate of interest is 2.5%.
8 Post reporting date
-- GBP1.44 million (net of fees) was raised via Placing and
Broker Options to fund future work programmes. 121,775,384 shares
were placed at 1.3 pence.
-- The Director's loan from CW Ahlefeldt-Laurvig and accrued
interest was fully repaid in March 2021
-- All salaries and fees re-instated to levels prior to cuts.
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END
IR UOSNRAVUSAAR
(END) Dow Jones Newswires
April 14, 2021 02:00 ET (06:00 GMT)
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