Europa signs farm-out deal with Angus

6th Feb 2017 13:32

(ShareCast News) - UK and Ireland-focussed exploration, development and production company Europa Oil & Gas announced on Monday that its wholly owned subsidiary has signed a farm-out agreement in relation to a 12.5% interest in the PEDL 143 licence in the Weald Basin with a wholly owned subsidiary of Angus Energy.The AIM-traded firm said it will retain a 20% interest in PEDL 143, where a well targeting the 5.6 mmbo conventional Holmwood prospect is anticipated to be drilled in 2017.It said Angus will pay 25% of the costs to drill an exploration well at Holmwood up to a gross well cost of £3.2m, and will pay 12.5% of all non-well costs and gross well costs above the cap.Europa will pay 20% of all non-well costs and gross well costs above the cap, and said it is now fully carried on well costs up to £3.2m.In the event of a discovery and subsequent development on the licence, Angus agreed to make a deferred payment to Europa of £265,625, covering back costs plus a 25% uplift.The farm-out agreement remained subject to regulatory approval by the Oil and Gas Authority."Following today's farmout, Europa will have a fully carried 20% share in Holmwood and the benefit of a partner with expertise in the Weald basin," said Europa CEO Hugh Mackay."As the operator of the nearby Brockham oil field, Angus can provide invaluable technical insights in tandem with our other partners including UKOG, a major stakeholder in the Horse Hill discovery."Mackay said in line with Europa's strategy to expose its shareholders to material rewards through the drillbit, while minimising exposure-to-exploration risk, the deal is the fourth farm-out it has secured for its UK licences within the last 12 months."We are working hard to replicate this farmout success with our industry-leading licence position offshore Ireland, and I look forward to providing further updates on our progress in due course."