Europa plans to expand Irish interests

British exploration company Europa Oil & Gas intends to expand its Irish asset portfolio beyond its two existing prospects off the south-west coast, which have a mean total resource potential of around 2bn barrels of oil.

The London-headquartered firm, which has exploration assets in Britain, Ireland, mainland Europe, and northern Africa, is unlikely to drill at its Irish prospects until 2015, but is likely to apply for a frontier licence this summer, ahead of its licensing options expiring in November.

It has already held exploratory talks regarding potential farm-out agreements for its Irish interests, with a number of high-profile international players understood to have shown interest.

The AIM-listed firm’s two offshore Ireland options — the Kiernan and Mullen prospects — are both located in the southern Porcupine Basin, off the south-west coast.

Previous testing has shown a 90% probability of 66m barrels of oil and a 10% probability of 1bn barrels existing at the Mullen prospect, with those numbers potentially being bigger at the Kiernan prospect.

The two assets combined have a mean resource potential of 2bn barrels.

Europa chief executive Hugh MacKay suggested that, whatever the true final figure, it is likely to be in the hundreds of millions of barrels bracket.

He added that Europa’s estimates to date have not been notional, but are based on 2D seismic work done last year, after the company was awarded options in the Government’s Atlantic Margin licensing round in late 2011.

“The attractiveness to the larger players should be that the Porcupine Basin is potentially not just a one prospect wonder, but a new play extending into open acreage,” said Mr MacKay.

He added that the company is definitely interested in expanding its Irish portfolio and fully intends to be involved in the Government’s next offshore licensing round, though a decision on the timing or location of this round has not yet been made.

Europa’s need for a development partner is obvious. The cost of undertaking 3D seismic work is being estimated at $27m (€20m), with actual drilling work costing another $50m-$100m.

The company is not concerned with waiting to see what Providence Resources and Exxon find at the nearby Dunquin field, with Mr MacKay proclaiming: “We’re happy to farm out now.”