23 Jan 2020 | 09:00 UTC — London

UK's Europa continues search for Irish gas partner after major pulls back

Highlights

Europa in talks with other companies on Inishkea prospect

Unnamed major withdraws from talks after 12 months

Inishkea seen holding 1.5 Tcf of gas near Corrib field

UK-based Europa Oil & Gas on Thursday said it was continuing its search for a partner to help develop the 1.5 Tcf Inishkea gas prospect offshore Ireland after an unnamed major withdrew from talks.

Europa in 2018 said it would "fast track" the development of Inishkea, which it considers a low-risk development.

The company said Thursday it has been in farm-out discussions with a number of parties in relation to development, including negotiations with the northwest European division of "a major oil company" that had been ongoing for more than twelve months.

"The major has now informed the company that, as part of a wider strategic review, the licenses are no longer under consideration for farm-in," it said in a statement.

It said discussions with several other parties regarding the farm-out are continuing.

"The company is prioritizing securing a partner to drill its flagship prospect in Ireland, the Inishkea prospect, which lies on FEL 4/19 in the Slyne basin," it said.

Inishkea is located close to the 1 Tcf producing Corrib gas field and associated infrastructure.

"The company therefore regards Inishkea as lower risk 'infrastructure-led' exploration [with] an estimated geological chance of success of one in three," it said.

Exploration well delay

Europa said it hopes to drill an exploration well in 2021, a delay to previous plans to begin drilling this year.

"We remain optimistic that we will secure a partner for Inishkea with whom we can drill what has the potential to be a transformational well for Europa," interim CEO Simon Oddie said.

"With gross unrisked prospective gas resources of 1.5 Tcf, a one in three chance of success, a location in a proven hydrocarbon region and lying close to the producing Corrib gas field, Inishkea represents a compelling drill target, one that continues to attract considerable interest from a number of potential partners," Oddie said.

Ireland is under-explored, with just 160 offshore wells drilled since the start of exploration in 1970, compared with more than 4,000 wells drilled offshore the UK.

It remains partly import-dependent despite the startup of Corrib at the end of 2015.

Corrib is now operated by Canadian company Vermilion after Shell sold its stake in the field. It has produced at some 350 MMcf/d or 10 million cu m/d.

Ireland is, however, limiting future exploration in its offshore, introducing a new policy that only licenses for exploration for gas would be awarded in the future.

Existing licenses are not affected.


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