Europa Oil & Gas and Cairn Energy announce offshore Ireland farm-out

LONDON -- Europa Oil & Gas, UK and Ireland focused exploration, development and production company, is pleased to announce that it has signed a farm-out agreement (FOA) with a wholly owned subsidiary of leading operator Cairn Energy PLC Group in relation to a 70% interest in and operatorship of Licensing Option 16/19. Europa will retain a 30% interest in the licence, which is located on the western flank of the South Porcupine basin, offshore Ireland.  

The FOA, which is subject to Irish Government approval, has been signed with Capricorn Ireland Limited, a fully owned entity of Capricorn Energy Limited which is a wholly owned subsidiary of Cairn Energy PLC.

Europa to be fully carried on $6-million work program

• Capricorn to fund a $6-million work program, which includes the acquisition, processing, and interpretation of 3D seismic, to acquire a 70% interest in and operatorship of LO 16/19
• 3D seismic to be acquired in 2017 and processed product will be delivered in 2018
• Future exploration will be based on the results of detailed prospect mapping work
• Europa will fund its 30% interest in LO 16/19 on completion of the fully carried work program

Existing data indicates presence of Cretaceous submarine fans on LO 16/19

• Europa previously provided a technical update on LO 16/19 on July 18, 2016
• LO 16/19 is covered by a sparse grid of 2D seismic and while detailed prospect mapping is not possible, Europa’s proprietary 3D in its adjacent Frontier Exploration Licence 2/13 is interpreted to contain Cretaceous submarine channels feeding submarine fans in LO 16/19
• The directors believe that LO 16/19 holds Cretaceous fans similar to those developed in Europa’s 100% owned FEL 3/13, where three prospects have been identified with combined gross mean un-risked prospective resources of 1.5 Bboe
• Europa will apply its considerable experience in mapping Cretaceous fans on 3D seismic in the Porcupine to the new 3D to be acquired over LO 16/19

Further farm-outs are being targeted of Europa’s leading licence position offshore Ireland

• Europa has seven offshore Ireland licences covering 5,818 km², six play types, three basins, and twenty prospects and leads which potentially hold gross mean unrisked resources of more than 4 Bboe and 1.5 Tcf of gas (Europa estimates)
• The FOA, which is the first by any company in Atlantic Ireland since 2013, demonstrates Europa’s ability to execute its strategy to secure partners to advance its offshore Ireland licences
• Europa is focussed on delivering farm-outs on its remaining six 100%-owned licences

Europa CEO Hugh Mackay said, “We are delighted to have secured a farm-in partner of the proven calibre of Cairn, and also to accelerate exploration on the Licence through the acquisition of 3D seismic this summer. We continue to talk to other potential partners for our remaining six offshore Ireland licences, which provide us with exposure to all the various play types being targeted in the region: Paleocene; Cretaceous Shelf; Cretaceous Fan; Syn-rift; Pre-rift; and Triassic gas.

“Activity across the Porcupine basin is expected to increase markedly this year and beyond: Providence Resources is expected to drill the Druid prospect in 2017; two new exploration wells may be drilled in 2018; and a natural conclusion to 3D seismic data acquired this summer and last summer could be more exploration drilling.  In terms of acreage and number of licences, Europa is a leading exploration company in Atlantic Ireland with a range of prospects spanning deep water high risk frontier exploration to shallow water, lower risk infrastructure-led exploration next to the Corrib gas field. We believe Europa will benefit from any exploration success in the region, either as a trail-blazer or fast-follower.”