Despite a lossmaking 12 months, Europa Oil and Gas said discussions are ongoing around potential routes to develop its Serenity discovery alongside the nearby Tain field.
In results posted on Monday Europa (AIM:EOG) reported a pre-tax loss of £884,000 for the 12 months ending July 2023, compared with a profit of £1.4 million the year before.
Revenues held steady at £6.7m and net cash generation reached £2.8m, with the company pinning the loss largely on a £1.7m write-off for an exploration licence in Morocco which expired in November 2022 and was not renewed.
However, it remains bullish on the prospects for the Serenity discovery in the central North Sea, and may seek to take on the licence for the neighbouring Tain discovery to progress a development with its partners.
Across its onshore assets, net production to Europa averaged 265 barrels per day (bpd) of which its share in the Wressle project made up more than 80%.
Off Ireland, Europa said seismic reprocessing of the FEL 4/19 licence data showed greater detail on the Inishkea West and Inishkea prospects, the former of which is now being mapped as “a large 4-way closure, with a prospective resource Pmean of 1,554 [billion cubic feet].”
Europa said a farm-out process on the licence “has been paused” until further reprocessing at 30Hz has been completed, with the first phase of the licence valid until 31 January 2024.
Tain and Serenity
In the UK North Sea, the company continues to press on with its minority (25%) stake in the Serenity discovery, despite the past year’s setbacks.
Operator i3 (75%) had hailed the prospect as a 100 million-barrel “company maker”, but disappointing appraisal results last year suggested hydrocarbons were “not present” at the well. Despite that, the partners maintain there is still a way forward for the project, potentially through unitisation with nearby fields.
Seismic data shows the Blake, Tain and Serenity fields share a common reservoir, with i3 and Europa having looked to combine the latter into a single development with Tain operator Repsol Sinopec.
That may be further complicated by Repsol’s decision not to pursue the 10m barrel Tain, with it and partner Viaro confirming earlier this month that is “no longer an active project and the joint venture partners no longer hold the licence.”
Europa maintains that a one-well development in the eastern area of Serenity around the discovery well “is economically viable” but reaffirmed in its announcement that unitisation discussions continue.
CEO William Holland – who stepped up to the role following Simon Oddie’s retirement in March – said the company was working with i3 Energy to determine “the best strategic direction for the prospect, with a variety of development scenarios being diligently considered including a development incorporating the Tain discovery that could be tied back to the Blake field or potentially developed with low-cost infrastructure as a standalone field.”
Asked as to the status of discussions, Europa told Energy Voice that the Serenity partners are considering “various asset monetisation options which could include an out of round application for Tain.”
The firm noted that its investment in Serenity has provided some “shelter” against the Energy Profits Levy for other income from its assets.
Year of ‘transition’
In a statement accompanying the results Mr Holland added: “It has been a year of considerable administrative transition for Europa: we set up a new London office, strengthened our in-house technical and managerial capabilities with new staff members and expanded our business development activity levels; all with the purpose of delivering our strategy faster and more efficiently.”
Europa shares rose slightly on the results, from 1.13p on open to 1.23p after midday.
Recommended for you
