Europa Oil to decline any North Sea licence offer

3rd May 2024 08:39

(Sharecast News) - Europa Oil & Gas said in an update on Friday that it received communication from the North Sea Transition Authority (NSTA) regarding its application for a licence as part of the 33rd UK Offshore Licensing Round.

The AIM-traded firm said the NSTA proposed a partnership between Europa and another party for the licence.

It said that after thorough consideration, it had chosen not to accept the proposed partnership, and informed the NSTA that if the licence were to be awarded solely to Europa, it would decline the offer.

During the fourth quarter of 2022, Europa conducted an analysis of available subsurface data, monetisation options, and the economics of developing resources within the licence.

However, changes in operating conditions and fiscal uncertainties had since emerged, diminishing the economic and strategic attractiveness of the licence.

As a result, Europa said it believed its resources would be better used on existing assets and exploring new opportunities in its core areas.

"Since making the application we have acquired an interest in the EG-08 licence in Equatorial Guinea, which we believe is very material," said chief executive officer Will Holland.

"Given the size of the company and our limited resources it is essential that we focus on where we see the best risk/reward proposition that can generate significant value for our shareholders.

"Any new asset needs to be considered carefully against other opportunities that are under evaluation to ensure that we are deploying our capital on assets that have the best potential of returning value to our shareholders."

At 1100 BST, shares in Europa Oil & Gas Holdings were flat at 0.9p.

Reporting by Josh White for Sharecast.com.