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Europa Oil & Gas awarded frontier exploration licenses, commences 3D seismic offshore Ireland

LONDON -- Europa Oil & Gas has commenced a 3D seismic acquisition program in the South Porcupine Basin offshore Ireland, following the award by the Irish government of frontier exploration licenses (FEL) 2/13 and 3/13 to Kosmos Energy Ireland and Europa.

Kosmos, as operator, undertook to accelerate the conversion of licensing options (LO) 11/07 and 11/08 into FELs in order to bring forward the acquisition of 3D seismic into the summer of 2013. Kosmos has secured the use of the M/V Polarcus Amani vessel from seismic contractor Polarcus to acquire the 3D seismic.

FELs 2/13 and 3/13 are located over 75% of the area formerly held under LO 11/07 and 11/08, respectively, and  combined cover approximately 1,500 sq km in the highly prospective South Porcupine Basin in the Irish Atlantic Margin. The FELs are effective from July 5, 2013, and were notified to the operator on July 11, 2013. Each FEL lasts for a period of 15 years, and is broken down into a maximum of four phases. The first phase of three years includes a commitment to acquire 740 sq km of 3D seismic on each license. The second phase lasts four years, and has a commitment to drill an exploration well on each license. As with the original LOs, the FELs will be operated by Kosmos, who hold a 85% interest, with Europa holding the remainder.

FELs 2/13 and 3/13 each cover an area of approximately 750 sq km in the South Porcupine Basin, and have been mapped using existing 2D seismic data, but are undrilled. Europa’s technical work to date has identified two, previously unknown, prospects in the Lower Cretaceous stratigraphic play: Mullen in FEL 2/13 and Kiernan in FEL 3/13. The company estimates these prospects to have gross mean un-risked indicative resources of 482 million bbl and 1.612 boe, respectively. Information about the Mullen and Kiernan prospects were provided to the markets in previous RNS releases dated November 6, 2012, and January 16, 2013, respectively.

As announced April 18, 2013, under the terms of the farm-in, Kosmos will fully fund the costs of a 3D seismic program in the first phase of each FEL, and pay 85% of costs incurred by Europa to date.  Contingent upon an election of the companies to enter into the second phase of the FEL, which carries a drilling commitment, Kosmos will incur 100% of the costs of the first exploration well on each FEL. The first exploration wells on FELs 2/13 and 3/13 have investment caps of $90 million and $110 million, respectively.  Costs in excess of the investment cap would be shared between Kosmos (85%) and Europa (15%).

07/15/2013

 

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