Europa Oil & Gas's management was gobsmacked by a near 20 per cent fall in its share price following publication of these interim results. Company broker finnCap must be bemused too, as its first note following the results is headed 'no major surprises'.
It's true that Europa issued an operations update at the end of March, in which it revealed that drilling delays on 100 per cent owned West Firsby field in Lincolnshire would produce 12 months' revenues and profits 'below market expectations'. But the latest results were more explicit.
As we disclosed when reviewing Egdon Resources' results, bad winter weather knocked UK onshore oil production. In Europa's case, various delays reduced production to an average of 151 barrels of oil per day (bopd) against an expectation of 500 bopd. All production comes from three fields in Lincolnshire. As far as gas is concerned, both Europa and Egdon have a 500 bopd target, but Egdon should be first to achieve it.
In its favour, Europa has some advanced projects in Europe. In Romania, an appraisal well will be drilled this year on the Voitinel (29 per cent owned) gas discovery. The company is also keen to drill again on Barchiz (20 per cent owned) and seems prepared to do this at its own risk. In France, Europa is reinterpreting and extending 3D seismic work on its 'very promising' 100 per cent owned Berenx prospect, close to the Pyrenees.
EUROPA OIL & GAS (EOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 18.75p | MARKET VALUE: | £21.4m | |
| TOUCH: | 18.5-19p | 12-MONTH HIGH: | 41.25p | LOW: 11.25p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 10p* | NET CASH: | £1.4m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.41 | -572 | -1.07 | nil |
| 2011 | 1.47 | 308 | -0.40 | nil |
| % change | +4 | - | - | - |
Aim: Oil & gas exploration and production *Includes intangible assets of £10.7m, or 9p a share. | ||||
