Europa Oil & Gas announced this morning it was transferring operation of the oil exploration licence around Leith Hill, near Dorking in Surrey.
In a statement to investors this morning, the company said it was handing over the operatorship of PEDL143, also known as Holmwood, to UK Oil and Gas plc (UKOG). The deal has to be approved by the Oil and Gas Authority.
Europa spent 10 years trying to develop an exploration site in the licence at Bury Hill Wood, on the side of Leith Hill.
The company secured planning permission and an environmental permit.
But the project was abandoned in September 2018 when the environment secretary refused to renew the site lease on Forestry Commission land because of the potential impact on nearby ancient woodland. Europa said the partners were continuing to look for alternative sites to drill the Portland and Kimmeridge formations in the licence area.
Europa said today it would retain its 20% interest in PEDL143. UKOG holds 40%. Other partners are Egdon Resources (18.4%), Angus Energy (12.5%), Union Jack Oil (7.5%) and Altwood Petroleum (1.6%).
The statement said:
“The decision to transfer operatorship of PEDL 143 is based on Europa’s focus on its high impact portfolio of exploration licences in Atlantic Ireland, its existing producing assets onshore UK, and the Company’s pursuit of new ventures in its chosen areas of focus, specifically the Atlantic seaboard, North Africa and NW Europe.
“With its operational activities centred on the Weald Basin, the Company believes UKOG’s direct experience with, and technical knowledge of, the Portland and Kimmeridge plays at the nearby Horse Hill discovery, will help inform a forward plan for the Licence.”
Today’s news reduces to three the number of UK onshore licences which Europa operates. The company continues to operate the West Firsby (DL003) and Crosby Warren (DL001) oil production fields in Lincolnshire. It remains the operator of PEDL181, also in Lincolnshire, where the Kiln Lane well was abandoned in 2015 after the sandstones were found to be water wet.
At the time of writing, UKOG shares had risen 1.86% to 1.31p on the news
UKOG companies operate three other UK onshore licences: PEDL126 (Markwells Wood) and PEDL234 (Broadford Bridge) both in West Sussex and PEDL331 (Isle of Wight).
The company is also the major investor in Horse Hill Developments Ltd, the operator of PEDL137 and PEDL246 around the Horse Hill exploration site near Horley In Surrey. UKOG also has interests in the IGas licences PEDL070 (Avington) and PL211 (Horndean).