Europa Oil & Gas (Holdings) plc is pleased to announce that it has been awarded a new Exploration Permit (‘Inezgane Offshore Permit’ or ‘the Licence’), covering an area of 11,228 sqkm in the Agadir Basin, offshore Morocco. A formal letter of award from the Office National des Hydrocarbures et des Mines (‘ONHYM’) is expected shortly and, following confirmation of its acceptance, Europa will be assigned a 75% interest in, and operatorship of, the Licence with ONHYM holding the remaining 25% interest.
Europa’s focus in the Inezgane Permit is on the Lower Cretaceous fan sand play, which is a prolific producer in West Africa. Europa has identified that the key elements required for a working hydrocarbon system, namely source, reservoir and seal, are all present in the Licence area. In addition, a number of large structural traps located on the edges and above salt diapirs have already been identified throughout the permit area. Europa plans to mature several of these stacked prospects, which each have the potential to hold over 250 million barrels of oil, to drillable status with a view to attracting one or more farminees to drill an exploration well in the second phase of the Licence.
The Licence, which lies in water depths of between 600 and 2,000m, has an eight-year term and comprises three phases. During the two-year initial phase, Europa will undertake a work programme, which includes reprocessing 1,300 km2 of 3D seismic data, as well as other technical studies. At the end of the initial phase, Europa will have the option to commit to drilling an exploration well in the second phase or to relinquish the Licence.
To date, only 10 wells have been drilled in deepwater Morocco, of which only three have penetrated a complete Lower Cretaceous section. Given the deepwater basins extend for some 1,800 kilometres offshore Morocco, it is clear that the play is highly under-explored. If the Lower Cretaceous play can be successfully unlocked, enormous upside lies within the rest of the Licence area.
Europa's CEO, Hugh Mackay, said: “The Inezgane Permit in Morocco is an excellent technical fit with Europa’s substantial licence position in the Porcupine Basin in Ireland where, among other plays, we are also targeting the Lower Cretaceous, a prolific producer in West Africa. In terms of our investment criteria, Morocco ticks all the boxes: a stable country with a transparent business environment; excellent fiscal terms; and low political and regulatory risk. From a technical, commercial and strategic perspective Morocco therefore represents an obvious new country for Europa’s technical team to deploy the first-rate knowledge and understanding of Lower Cretaceous plays it has gained through its work across our industry-leading licence position in offshore Ireland.
“We very much look forward to working with ONHYM in the initial phase of the Licence to mature prospects, which have the potential to hold up to 250MMBO each, to drillable status over the next 2-years. Together with our well-established positions in Ireland and the UK, we now have multiple work streams underway concurrently, all of which have the potential to generate significant value for our shareholders. With this in mind, I look forward to providing further updates on our progress.”
