One of the companies behind oil production plans at Wressle in Lincolnshire is optimistic that it will overturn two planning refusals when a public inquiry starts next week.
Europa Oil and Gas was refused planning permission twice for its production proposals for the site near Scunthorpe.
It has appealed against the decisions by North Lincolnshire Council. A public inquiry is due to start in Scunthorpe on 7 November 2017.
In Europa’s annual results, published yesterday, chief executive, Hugh Mackay, said:
“We remain confident that the green light will finally be given to bring the Wressle discovery on line.”
According to the accounts, Wressle could be producing 500 barrels of oil per day in 2018.
Europa has a 20% interest in the oil field. If it won the planning appeal and the field operated as predicted, the company said it could add 100 bopd, almost doubling its total current production levels.
Mr Mackay said:
“By adding around 100bopd to our existing production, Wressle promises to bring our operational breakeven down to US$35 a barrel, a major milestone for the Company.”
“Overshadowed by the Weald”
But company chairman, Colin Bousfield, said production at Wressle could be “overshadowed” by developments in the Weald Basin.
Europa has planning permission to drill a well at Bury Hill Wood in what it calls the Holmwood prospect near Dorking in Surrey. Surrey County Council deferred a decision on the traffic management plan at a meeting this month. Drilling is now expected to be in the first half of 2018.
Europa has estimated 5.6m barrels of oil in the Holmwood prospect. It is exploring in the same Kimmeridge limestone that is to be tested at Horse Hill. Angus Energy has also drilled a well into the Kimmeridge at Brockham, also near Dorking.
Mr Bousfield said:
“Having produced at Horse Hill, albeit for a limited period, at over 1,300 bopd, the Kimmeridge represents a new play in the basin which is now due to be tested at Horse Hill and the nearby Brockham field shortly.
“Together with the drilling of Holmwood, the months ahead promise to be an exciting period for UK onshore exploration, and once again Europa will be at the heart of it.”
According to the accounts, Europa raised £3.4m (£3.1m after expenses) during the year with a share placing. Onshore in the UK this will fund a 3D seismic survey of the Cloughton gas discover in PEDL343 and a share of a 2D seismic survey over the Hardstoft oil field in PEDL299. Both surveys will help to decide on drilling locations.
It sold 3.4% interest in PEDLs 180 and 182, which include the Wressle oil field, to Union Jack Oil plc for £0.6m. It also agreed a sale, dependent on planning permission, of 10% interest in PEDLs 180 and 182 to Upland Resources for up to £1.85m (of which £1.3m is in cash).
Europa acquired Shale Petroleum Ltd, increasing its interest in PEDL299 (Hardstoft oil field) to 25% and PEDL343 (Cloughton gas discovery) to 35%
It also farmed out 12.5% interest in PEDL143 (Holmwood) to Angus Energy. Europa retains 20% and is carried on well costs up to £3.2m
Group revenue: £1.6m (2016: £1.3m)
Pre-tax loss: £0.7m (2016: 1.9m after £1.2m write off in ???)
Cash used in operating activities: £0.26m (2016: £0.32m
Net cash balance at 31 July 2017: £3.6m (31 July 2016: £1.7m)
Average barrels of oil equivalent per day (boepd): 113 (2016: 123)
Cost of sales: £1,459,000 (2016: £1,282,000)
Administrative expenses: £553,000 (£2016: £593,000)
West Firsby (100% interest), Crosby Warren (100% interest) and Whisby-4 (65% interest). Recovered 113 boepd in 2017 (2016: 123boepd)
PEDL180 (Wressle) and 182 (Broughton North). Europa holds 20% of the licences after sales to Union Jack Oil and Upland (dependent on planning permission). Tests indicate an initial flow rate of 500 bopd gross from the Ashover Grit interval at Wressle. Inquiry into Europa’s appeal against refusal of planning permission to be heard in November 2017.
PEDL299 (Hardstoft). Europa’s interest is 25%, alongside Upland (25%) and the operator INEOS (50%).
PEDL143 (Holmwood). Europa has a 20% interest after a farm out to Angus Energy. Other partners are UKOG (30%), Egdon Resources (18.4%), Angus Energy 12.5%), Warwick Energy (10%), Union Jack Oil (7.5%) and Altwood Petroleum (1.6%).
PEDL343 Cloughton. Europa holds 35%, alongside Arenite 15%, operator Third Energy 20%, Egdon Resources 17.5% and Petrichor Energy 12.5%.
The public inquiry begins on Tuesday 7 November 2017 at Grange Farm Hobbies Centre, Wesley Road, Scunthorpe DN16 1SA. It is expected to run for six days.