Europa, Union Jack in UK Onshore Asset Deal

Aim-listed upstream minnow Europa Oil & Gas, focused on Europe, has sold about a tenth of its 33.34% interest in onshore UK licences PEDL 180 (Wressle discovery) and 182 (Broughton North prospect) to Union Jack Oil (UJO).

The deal sets a benchmark for other transactions in the asset, said Europa CEO Hugh Mackay in a statement on the Alternative Investment Market September 27.

(Credit: Egdon)

Under the terms of the agreement, UJO will acquire a 3.34% working interest in both licences for a cash consideration of £600,000, implying a market value of £5.4mn for Europa’s remaining 30% interest in the licences.

Wressle is expected to start production at a gross rate of 500 barrels/day in early 2017. Europa’s anticipated net share of 150 b/d from Wressle is expected to more than double existing production from the West Firsby and Crosby Warren fields and Whisby-4 well.

Subject to approval of the assignment of interest from the Oil & Gas Authority, Europa will end up with 30.00%, along with Egdon Resources (25.00% and the operatorship), Celtique Energie Petroleum (33.33%) and UJO (11.67%).

Europa CEO Hugh Mackay said, “We consider this transaction to represent a sensible monetisation of part of the asset now it has been largely de-risked, whilst still retaining sizeable exposure to production and upside on the other reservoirs. Importantly, this transaction provides investors with a point of reference for the value of our remaining 30% interest in the licences. At £5.4mn our 30% interest in these two licences accounts for almost half our current market capitalisation."

Late last this week geoscientists ERC Equipoise distributed to the partners a so-called 'competent person's report' putting a range of values on the amount of resources in place at each licence.

William Powell