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Europa Oil & Gas (LSE:EOG) is set to become the second firm to potentially establish an oil and gas industry in Ireland should its initial analysis of the hydrocarbon potential beneath the Atlantic side of the Irish waters proved correct.
In a statement today, the AIM-listed oil and gas explorer and producer said about 66 million to 1.1 billion barrels of oil is potentially trapped within the South Porcupine Basin, west of Ireland as indicated by initial prospect evaluation, with a P50 resource of about 318 million barrels of oil.
Europa is the second explorer to have presently undertaken seismic data analysis in the surrounding waters of Ireland after Providence Resources (LSE:PVR) proved over a billion barrels of oil and gas deposits in the Celtic Sea, south of the country.
Providence, which recently said could recover a mean of about 280 million barrels of oil from the Barryroe oilfield off of County Cork, is also set to drill the Dunquin well located within the Porcupine basin during the first quarter of 2013.
Oil was first discovered in the said region in 1981 with the Burren discovery well drilled by Phillips Petroleum and Providence’s predecessor company, Atlantic Resources.
Whilst the well led to the discovery of trillion cubic feet of gas and hundreds of million barrels of oil, development was stalled due to a combination of high production costs, lack of infrastructure, and low prices of oil and gas.
New Potential
“We believe the South Porcupine Basin has the potential to host a new hydrocarbon province,” said Europa Chief Executive, Hugh Mackay.
Europa has been actively seeking a partner to share the burden of exploration since it acquired the licence in 2011 will be presenting the latest development during the Atlantic Ireland Conference in Dublin, where firms will exhibit the offshore hydrocarbon potential of Ireland, next week in the hope to strike a farm-out deal.
The two previously unknown prospects, Mullen – where the initial hydrocarbon estimates came from – and Kiernan, were identified via 2D seismic data and were declared to be potentially hydrocarbon-bearing back in September 2012.
“In order to maximise the potential of these prospects we remain in search of a joint venture partner with who to further de-risk Mullen and Kiernan and mature them to a drillable status,” Mr. Mackay stated.
Shares of Europa rose as high as 10 pence earlier today, following the announcement and settled at 9.375 pence by 2:45 PM GMT, or 13.6% higher than yesterday’s closing.
Should these prospects proved to be successful in identifying oil and gas, Europa may also duplicate Providence’s five-fold rise in market value.
