Europa Oil & Gas has announced the signature of the Serenity farm-in agreement with i3Energy North Sea ('i3E') in respect of UK Seaward Production Licence P.2358, Block 13/23c. 

Highlights

• Europa is acquiring a 25% interest in Serenity by paying 46.25% of the appraisal well cost, equating to a 1.85 to 1 carry.
• The farm-in is in line with Europa's previously stated strategy to acquire an appraisal asset, adding to its existing producing and high impact exploration assets, and thereby creating a more balanced asset portfolio for its investors.
• The Serenity appraisal well is scheduled to be drilled and formation tested in late Q3 2022 at a gross cost of £14 million.
• The Carry is capped at a gross well cost of £15 million, of which Europa's interest will be £6.94 million. Thereafter, each party will fund its interests proportionally.
• Serenity is strategically located near existing infrastructure in the North Sea, however the appraisal well could provide sufficient recoverable volumes for a standalone development.
• There are no material conditions for Europa to satisfy to complete the farm-in,
• Europa will fund an escrow account with its paying interest obligation.
• Completion is subject to approval of the North Sea Transition Authority ("NSTA") to the creation of a new block within Licence P.2358 (the "New Serenity Block") and to assignment of an interest in the Licence and New Serenity Block to Europa.

Simon Oddie, CEO said:
"I'm delighted to announce the signature of this farm-in which fulfils our promised goal of adding an appraisal asset to the Europa portfolio. Serenity is a late-stage appraisal and development asset that provides our shareholders with exposure to a very exciting asset that could deliver significant near-term value to our shareholders with the drilling of the Serenity appraisal well expected in late Q3 of 2022. The objective of the well is to prove up additional volumes of hydrocarbons beyond those encountered in the original discovery well, which alone are considered commercially viable. It is a welcome addition to our existing producing and high impact exploration assets and part of our long-term strategy to create a balanced portfolio of high-quality assets with the view of creating long-term value for our shareholders."

Background

Europa announced a Conditional Fundraising to raise up to £7 Million on 2nd March 2022 to fund the acquisition by the Company of a farm in of Serenity located in the Central North Sea. On 3rd March it announced that it had conditionally raised gross proceeds of £7.02 million, before expenses, through the conditional placing of 390,000,000 new ordinary shares of £0.01 each at an issue price of 1.8 pence per share and this was subsequently approved at the General Meeting held on 25th March. The Farm-in Agreement in for Serenity was signed on 20th April 2022.

KeyFacts Energy: Europa Oil & Gas UK country profile   l   KeyFacts Energy: Farm-in agreements

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