Europa Oil & Gas Secures Farm-Out Agreement for EG-08 Block

Europa Oil & Gas (Holdings) plc (AIM: EOG) has announced a significant farm-out agreement (FOA) through its associated company, Antler Global Limited, potentially unlocking substantial value from its EG-08 production sharing contract (PSC) in offshore Equatorial Guinea.

The deal centers around the Barracuda prospect, estimated to hold 893 BCF (Pmean) of gas.

Under the FOA, Fuhai (Beijing) Energy Limited, a subsidiary of Fuhai Group New Energy Holding Co., Ltd, will acquire a 40% working interest in EG-08. In exchange, Fuhai will fund 95% of the Barracuda well costs, up to $53 million. Antler will retain operatorship and fund the remaining 5% of well costs.

This agreement significantly de-risks the project for Europa, providing a 2.38 to 1 carry, reflecting the high chance of success and resource potential of the asset.

The deal remains subject to approval from the Ministry for Mining and Hydrocarbons Department of Equatorial Guinea and Overseas Direct Investment approval from the Shandong Provincial government.

Europa holds a 42.9% equity interest in Antler, translating to a 17.2% net attributable percentage in the EG-08 PSC post-farm-out. The remaining interest is held by Fuhai (40%) and GEPetrol (20%), the national oil company of Equatorial Guinea.

Fuhai Holding, a major player in the energy and chemical sector with 2024 revenues of US$12.7 billion, brings substantial financial and operational expertise to the project. Their operations include crude oil processing, hazardous chemical transportation, petrol stations, and oil production.

Following geophysical analysis, the EG-08 block is estimated to contain 2.213 TCF (Pmean) of prospective gas volumes. Antler intends to drill the Barracuda well in 2026, contingent on regulatory approvals.

William Holland, Chief Executive Officer of Europa, said, “This is a significant milestone for Europa and I am delighted to have entered into this agreement with Fuhai…The signing of the Farm-Out Agreement with Fuhai is the culmination of three years of hard work…The farm-in is without question a great result for Europa.”