Lower costs offset drop in H1 revenue at Europa Oil & Gas

15th Apr 2014 13:43

Revenues slipped lower in the first half, Europa Oil & Gas admitted on Tuesday, after it was hit by a decline in the average number of barrels of oil equivalent per day from 177 to 170. Turnover fell from £2.2m to £2.1m, but pre-tax profit doubled to £0.45m from £0.2m, lifted by a reduction in the cost of sales, from £1.45m to £1.1m. Chief Executive Officer Hugh Mackay said: "Europa is fully funded for four exploration wells. Onshore UK we expect two exploration wells, Wressle and Kiln Lane, will be spudded in 2014, and we have further drilling candidates to follow. This summer we expect a drilling decision for our offshore Ireland licences which if positive may lead to two exploration wells, one in FEL 2/13 and one in FEL 3/ 13. "Europa's costs for both these potential wells are already funded by farm-in and the first one could be as early as 2015. Finally in France we have commenced well planning and permitting for a Berenx Shallow exploration well in parallel with farm-out activity. "Exploration success in the UK will boost cash flow and will enable portfolio growth; we believe exploration success in France or Ireland would be a company maker."Net cash generated from operations was £0.6m (H1 2013: £1.0m) and it collected £0.3m from Kosmos in connection with their farm-in to Ireland.This, combined with the proceeds of a placing and open offer, resulted in a period-end cash balance of £4.8m, up from £0.7m at the end of July 2013. The share price had fallen 1.91% to 7.97p by 1:23.NR