Europa Suffers Farm-out Setback off Ireland
London-listed Europa Oil & Gas reported on January 23 that a “major oil company” had walked away from talks to farm into three of its licences off the coast of Ireland.
Europa has been in discussions with the major’s northwest Europe division and other parties on farming out shares in its frontier exploration licences (FELs) 4/19, 1/17 and 3/13 for more than a year.
“The major has now informed the company that, as part of a wider strategic review, the licences are no longer under consideration for farm-in,” Europa said in a statement.
Talks with several other parties continue, according to Europa. The company said the Inishkea prospect at FEL 4/19 remained its top priority, as its close proximity to Ireland’s largest gas field Corrib offers lower risk “infrastructure-led” exploration. Inishkea is estimated to hold 1.5 trillion ft3 in gross unrisked prospective gas resources.
Europa wants a partner at Inishkea to help fund drilling work. The company aims to conduct a well survey this summer, in order to start drilling in 2021.
“While we cannot comment on timings for the conclusion of ongoing discussions, we remain optimistic that we will secure a partner for Inishkea with whom we can drill what has the potential to be a transformational well for Europa,” Europa’s interim CEO Simon Oddie said. “With gross unrisked prospective gas resources of 1.5 trillion ft3, a one in three chance of success, a location in a proven hydrocarbon region and lying close to the producing Corrib gas field, Inishkea represents a compelling drill target, one that continues to attract considerable interest from a number of potential partners.”
Investor confidence in Ireland’s oil and gas industry has been undermined in recent years by policy uncertainty and regulatory delays. In September, prime minister Leo Varadkhar announced that the country would no longer explore for oil, while continuing the search for gas.