I noticed EOG in Shares Magazine last week, and having done some research, think they may be a decent producer / exploration play.



Europa Oil & Gas (Holdings) plc, is involved in the exploration and production of hydrocarbons in Europe. The Company has a balanced portfolio of 12 European oil and gas exploration and production assets in the UK, Ukraine, Romania and Poland. The portfolio contains proven plus probable and development reserves of 7 million barrels oil equivalent (mmboe) net to Europa and exploration potential of a further 28 mmboe. Wellhead revenues are currently in excess of 200,000 per month from a volume of 340 barrels of oil equivalent per day (boepd). These figures are set to rise substantially by the year 2007 when projected production will be above 7000 boepd.


The Company has an active near term drilling programme with three wells scheduled to spud in the first quarter 2005. The drilling programme mimics the balanced portfolio with one appraisal well on the recent Bilca Gas discovery in Romania, one development well on the West Firsby Oilfield in the UK and one exploration well in Romania.



Europa is set to become a significant producer of hydrocarbons in the near future and intends to develop a substantial independent upstream oil & gas business. The management has a strong mainstream oil and gas background, which enables Europa to continue to identify, acquire and develop profit-making oil and gas assets.



Europa Oil & Gas (Holdings) plc was admitted to the London Stock Exchanges Alternative Investment Market on November 11, 2004 and trades under the symbol EOG.





Corporate website : Click HERE

EOG has a new financing facility. Looking good.

You have to take your hat off to Headstart, though; they get 42,500 up front and a shed-load of warrants before EOG even draws any funding. Not bad for a day's work!

BTW Headstart are the VC types who funded Scotty (SCO). I assume Headstart would know when they are onto a good thing, but in Scotty's case there was a lot of dilution involved. WDIK/PDYOR.

For Release: 2nd June - 7am

Europa Oil & Gas (Holdings) plc

(`Europa')

Financing Facility

The Board of Europa Oil & Gas (Holdings) plc - AIM: EOG - the hydrocarbon
production and exploration company, announces that Europa has entered into an
agreement with the Headstart Group of funds under which a share finance
facility of up to 1.5 million will be made available. Any draw down of the
facility is at the sole discretion of Europa.

The facility can be drawn down in monthly increments of up to 100,000 in
exchange for the issue of new ordinary shares and is available at any time up
to 1 December 2008.

In consideration for making the facility available Europa has agreed to pay
Headstart a one-off fee of 42,500. In addition, Europa has issued 300,000
warrants to Headstart granting the right to subscribe for ordinary shares at
31.20p per share. These warrants are exercisable at any time up to 31 May 2009.

The cost of the Headstart financing compares extremely well with the cost of
the IPO, being almost half the cost in percentage terms. The 5mm raised at the
IPO was at a cost of 14.05% of the proceeds, along with one warrant given for
every two shares issued. The 1.5mm Headstart facility cost is 8.2% of the
proceeds, at an equivalent share price, with one warrant for every twenty
shares.

Revenues are set to increase significantly in the next quarter when the Bilca
Gas Development comes onstream. The share finance facility gives Europa the
flexibility to pursue additional acquisition opportunities and the increased
ability to maintain the pace of development of existing projects.

Ewen Ainsworth, Finance Director, commented

"With the pace of Europa's commercial progress accelerating, particularly in
the light of planned testing of the gas shows encountered in the Costisa-1 well
and positive results from the recent seismic acquisition in Romania, the Board
decided it was prudent to secure funding in order to maintain this progress.
The facility has the added benefit of being discretionary, and will only be
used as required."

Nice to see the SP over 30 again, too.

And there's more! EOG will definitely be re-testing Costisa.

Europa Oil & Gas (Holdings) PLC - License Update
For Release - 5 June 2006

Europa Oil & Gas (Holdings) plc

Licence Update

The Directors of Europa Oil & Gas (Holdings) plc, the production and
exploration company, are pleased to announce that the Romanian National Agency
for Mineral Resources has approved an extension of up to three years and change
of Operatorship for the EPI-3 concession. Europa will operate the concession,
situated in the East Carpathians, with a 33.3% working interest, Czech partner
MND holding the remainder. A side agreement gives Europa an 80% beneficial
interest in the eastern part of the block, containing the Costisa-1Z well, and
a 20% interest in the western part of the block.

Both Europa and MND recognise further prospectivity in the Block, which lies
immediately north of the Moinesti oilfields and immediately west of the 600bcf
Roman gasfield. Testing the Burdigalian gas shows encountered in Costisa-1Z is
an initial priority with the re-entry and testing of these gas sands
anticipated to take place in summer 2006. Further potential around the Geamana
and Tazlaul Mare fields will also be assessed.

Costisa-1Z was suspended for later re-entry in December 2005, following
encountering strong gas shows in Burdigalian sands at a depth of approximately
1,000 metres. It was not technically justifiable to test these sands in the
original borehole, as they had been exposed to heavy drilling muds for over
three months before being logged and cased. Consequently, a short sidetrack
away from the damaged zone is planned with a drill stem test.

Whilst the logs were of poor quality due to excessive borehole size in the
original hole, they confirmed the gas shows were from the upper 25 metres of a
50 metre sandstone-prone unit with up to 20% porosity. If the initial test is
successful, it could be extended to provide detailed reservoir performance data
and the gas exported into the nearby pipeline system.

Paul Barrett, Managing Director, said 'I am personally looking forward to this
test with great anticipation. There are indications on the seismic data that
this play extends northwards from Costisa. If successful, its modest depth and
proximity to the gas pipeline system will minimise development costs'.

About Europa Oil & Gas (Holdings) plc

Europa Oil & Gas (Holdings) plc - AIM: EOG - focuses on the production and
exploration of hydrocarbons in Europe and North Africa. It currently produces
210 barrels of oil per day from UK onshore fields and 25 barrels of oil
equivalent from the Ukraine. Production is expected to rise significantly after
its Romanian Bilca Gas Project comes onstream later this year. Operating a
balanced portfolio, Europa currently has field appraisal activity on projects
in the UK Southern Gas Basin and onshore Romania and exploration activity on a
further eight licences across the Europe - North Africa region. For more
information please visit www.europaoil.com.

My thoughts: there has been a good spate of positive newsflow from EOG of late. The next twelve months or so look as if they could be busy for the company, with both production increases and lots of appraisal and exploration planned.

It's a pity that the SP hasn't reacted positively to today's RNS; hopefully the next few months will bring news that attracts a lot more interest.

WDIK, PDYOR etc.

ST, Investors Chronicle tipped it as a buy last week and oil price is heading north, which will show on profits this year.

By the way how do i insert a picture from my pictures with the insert image icon?
I tried to do it on the football thread and it came up blank.

Thanks Barclay - good info re the IC tip. I see they are in sharp disagreement with our very own "Shares" mag, which gave this a red triangle in the AIM Guide.

Re pictures, if you copy-and-pasted the whole link from your browser addresss window, then you probably did it okay, but some webpages don't allow this kind of transfer of links. I think.

What did shares Mag say that disagrees with IC?

They didn't explicitly say anything negative, just stuck a red triangle beside their summary of the co (which did mention forthcoming production increases, etc). Strange.

Nice article on Oilbarrel.com today.

YES! I'd like to read that nice article on oilbarrel.com

Warrants up 0.5p yesterday. (stop yawning at the back - this will get better!)

Barclay, and others,

I thought I'd revive Andy's thread since it has quite a lot of info on it already and things are getting fragmented on the other, shorter threads.

I wanted to address the SP's 11% rise that took place yesterday. I am convinced that the rise is due to the jump in the gas price that took place in the last couple of months. Henry Hub gas, which I am using as my datum (prices and charts available on oilbarrel.com) is up a little over $2.00 from its midsummer low of $5.55.


EOG offers one important advantage to its investors - the Romanian domestic gas market fixes the price on a year-by-year basis.

I quote from a recent RNS: "Currently, Romanian domestic gas production is sold at a 20% discount to the previous year's import price resulting in a 2006 price of $4.30 per thousand cubic feet (mcf). There are strong signals that the 20% discount will reduce substantially with Romanian entry into the European Union in 2007 resulting in an improved gas price."

Thus the domestic gas price equals 80% of the average price of imported gas for the previous calendar year. The figure of $4.30 for gas sold in the Romanian market is therefore a fixed quantity and won't change until the next calendar year.

WHY IS THIS EXCITING?

Two reasons:

1.) The gas price is up again this year. Looking at the chart of Henry Hub, the gas price for the first seven months of the year has been a little over $6.00. IT GETS BETTER! Temperatures in continental Europe have plummeted. From around 32 C a few weeks ago, we are now "enjoying" daytime temperatures as low as 14 C, with night lows of a mere 4 degrees! The five-day forecast gives highs of 8 - 19 C. Over in Bucharest things are still nice and summery, but the price of the gas they import (which in turn fixes the price of domestic gas for the following year) has increased in spite of the summer weather.

It seems likely that the gas price low of $5.55 is about as low as things will get this summer - and the good news is that the higher winter prices are on the way. Even if the average gas price for 2006 is only $6.00, 80% of that gives a Romanian domestic gas price of $4.80 for the year 2007. That's an 11.6% advance on this year's price of $4.30 (which itself was an improvement on the previous year. I think the average gas price for 2006 is likely to be much higher than $6.00. Already we have an average of $6.00 for the first half of the year. If we take the last half of last year as typical, the average gas price for those six months was approx $10!

I'd be happy to take a very conservative average gas price of $6.50 for 2006, translating to a Romanian domestic market price of $5.20 for 2007 - a 21% advance on the current year.

This gives us a rough idea of where EOG could be in terms of turnover, assuming we get confirmation of the second bit of good news:

2.) EOG is about to announce a large production hike at the Bilca field (EOG 28.75% interest). This has already been well-discussed and documented on this thread. Knowing roughly how much the gas will be worth next year, we can already get a fair idea of what EOG's turnover will be in 2007.

So there's good news on the way, we trust! In spite of this, EOG remains a smaller fish at the moment and is still in need of a real "company maker".

Price rise of 11% on Friday!

Looking at the chart of this year's gas prices, it seems clear that EOG will benefit from a domestic gas price in Romania of $5.20 or more in 2007 (current gas price there is $4.30).

Add this to the forthcoming production hikes and things are looking better than ever for EOG (and the warrants).

Aren't they going to change from a fixed price to our prices in 2007?
This would be better for us, as becuase of the discount we are losing potential revenues that other gas companies are making. This does not seem fair, as EOG
shares would be a lot higher already if there was no discount.

Why should we be happy with $4.50 per barrel when gas prices are at $7 plus and rising, that price will nearly double your revenue without any more gas reserves.

But having said that Europa warrants should at least double in time on what we already have because of the gearing effect, the shares only have to go up 25% or so to achieve this.

I think the price gap should narrow in 2007 due to EU entry, from my understanding of what I have read. When and whether it will finally "close" is a moot point, as I can't imagine there will be legislation forcing the domestic market to pay the same as the import market - it may be more a case of market forces evening things out gradually.

Up today: EOG Bid: 31.5p Offer: 33p Change: 0.75 Market Cap 19 mil.

The announcement of commercial production going online at Bilca/Fratauti should be made any day now.

AFX news release 28 september 2006: Bilca production has started - production is up 130%; the wells will be monitered for a 6 months period at this rate to see how well is performing, and then production will be increased.

Great news, but the warrants and shares have not responded, i think because of the lower gas price, due to the warm weather which should reverse over the coming winter.

Barclay, I don't think that the increase in production was as much as expected, adding to the factors you mentioned which have conspired to drag on the SP.

Call me impatient, but I have decided to sell my warrants as I think I have seen enough to realise that there won't be any surprises in the forthcoming financial results. For me there was a lot riding on the Bilca announcement which has not been fulfilled. I thought that short-term I might stand a chance of making more money with the awaited news of a licensing deal for Plethora Solutions (PLE), so that's where I've invested my cash today.

London presentation next week, FREE registration, click here

Do it now! Get out of sterling at $1.56 and into USD and/or gold

An extract from the diaries of infamous bear raider Evil Knievil

Today on UK-Analyst.com we bring you an exclusive extract from the diary of infamous bear raider Evil Knievil, taken from his popular thrice-weekly column (written via his idiot diarist Tom Winnifrith) only on t1ps.com

February 5th

A brief diary follows. Normal service resumes on Monday as I have just got back from the West End for lunch having spent an hour and half on physio.

I am still a gold bull and I think Quintain (QED) is a buy at 61p. In fact, I think QED is a slam dunk buy since it is at such a huge discount to net AV.

I have also bought Europa Oil & Gas (EOG) for the weekend's drilling results.

Tidal Bay is a bet at 8/1 for the World Hurdle, Cheltenham 18th March.

I have sold Provexis (PXS) short at 8.2p.

It's great seeing the EU fall apart. Slithering down the Greecy pole.

UK-Analyst.com