Europa Oil & Gas’s battle plan is to increase oil output from its East Midlands fields and use surplus cash to fund oil exploration in Romania and southern France. Short term, it has been knocked off course by a wellhead fire in June 2009 at the main West Firsby field, north of Lincoln. So in the latest half year, Europa’s average oil production fell from 228 to 172 barrels of oil a day (bopd). The 2009-10 interims also include a larger write-off of £738,000 (£297,000).
Europa reckons that a combination of upgrade work and another production well at West Firsby and a workover of shut-in well Crosby-Warren -2, north of Scunthorpe, could push up net production to 500 bopd by end-2010. It may need the money because of exciting prospects in northern Romania, close to the Ukrainian border, where Europa has a 29 per cent stake in the Voitinel prospect. A €2.5m well drilled late in 2009 tested 3m cubic feet of gas a day unstimulated in sandstone 1,600 metres deep. Later this month the operator will re-enter the well to fracture-stimulate the tested zone and flow-test the untested zone. A second well may be drilled at end-2010.
In Aquitaine, Europa has a 100 per cent interest in a block next door to the deep producing Lacq Gasfield, France’s largest gasfield, which was drilled by Elf in the 1960s. A farmout seems likely.
EUROPA OIL & GAS (EOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 14.5p | MARKET VALUE: | £10.9m | |
| TOUCH: | 13.75-15p | 12-MONTH HIGH: | 24.25p | LOW: 5.75p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 10p* | NET DEBT: | 14% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.70 | 564 | 0.51 | nil |
| 2010 | 1.41 | -572 | -1.07 | nil |
| % change | -17 | - | - | - |
*Including intangibles of £8.97m, or 12p a share. | ||||
