For such a small exploration company, Europa Oil & Gas (EOG) talks a good game. Although it did not drill in its financial year to July, it remains bullish about the prospects for what chairman Simon Oddie calls its “leading licence position in the emerging hydrocarbon hotspot that is Atlantic Ireland”. The year ahead is a critical test of the latter claim.
Indeed, flagging the potential of 6.4bn barrels of “gross mean unrisked prospective resources” only makes sense if the supermajors, majors and large independents currently in Europa’s data rooms decide to farm in. They have 30 prospects across six play types in three basins to choose from.
Elsewhere, momentum in the UK has been checked by the rejection of planning consent for the Wressle oil development and an exploration well in Surrey, although the group still trumpets the “meaningful revenues” from its onshore production.
At present, cash generation from its three small oilfields in the East Midlands is enough to cover operational expenses, although it seems optimistic – or overly farsighted – to suppose that a reversal of the Wressle application should provide a “cash generative platform with which to invest in other projects”. After all, Europa’s net cash position has halved in a year.
FinnCap expects earnings per share of 0.1p in the year to July 2019.
| EUROPA OIL & GAS (EOG) | ||||
| ORD PRICE: | 4.2p | MARKET VALUE: | £13m | |
| TOUCH: | 3.8-4.2p | 12-MONTH HIGH: | 7.7p | LOW: 3p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 1.6p* | NET CASH: | £1.8m | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 3.88 | -0.68 | -0.21 | nil |
| 2015 | 2.21 | -4.13 | -0.86 | nil |
| 2016 | 1.27 | -1.90 | -0.67 | nil |
| 2017 | 1.57 | -0.68 | -0.19 | nil |
| 2018 | 1.63 | -2.29 | -0.87 | nil |
| % change | +4 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £5.96m, or 2p a share | ||||
