Annual Report and Financial Statements
EUROPA OIL & GAS (HOLDINGS) plc
For the year ended 31 July 2020
Company registration number 5217946
Introduction / Highlights
Europa Oil & Gas (Holdings) plc, the AIM traded Ireland, Morocco and UK focused oil and gas
exploration, development and production company, announces its final results for the 12 month period
ended 31 July 2020.
Operational highlights
Onshore UK – production on course to more than double to over 200bopd
• Wressle Development granted planning consent on appeal
• First oil at Wressle set to commence at an estimated gross rate of 500bopd late 2020
• Estimated break-even oil price (excluding Europa’s corporate overheads) of US$17.6 per barrel for
Wressle, well below current oil prices
• 92boepd produced from Europa’s three existing UK onshore fields during the year – matches FY
2019 performance
Offshore Ireland - portfolio refocused on proven gas play in the Slyne Basin
• Acquisition of a 100% interest in Frontier Exploration Licence (‘FEL’) 3/19, offshore Ireland, from
DNO (pending regulatory approval)
o Located close to the ~1tcf producing Corrib gas field in the Slyne basin and the 1.5 tcf
Inishkea prospect on Europa’s 100%-owned FEL 4/19
Includes the 1.2 tcf Edge prospect
o
• Applications submitted for the relinquishment of four licences offshore Ireland where primary
prospectivity is oil - LO16/19, LO16/22, FEL2/13 and FEL3/13
• Total non-cash write-off of £4.0 million
• Forward plan to include FEL 3/19 in a relaunch of the farmout of its strategic position in the Slyne
Basin
Offshore Morocco - awarded 11,228 square km Inezgane licence in the Agadir Basin
• Area equivalent to about 50 UKCS North Sea blocks
• 14 prospects and 16 leads with the potential to hold in aggregate close to 10 billion barrels of
unrisked oil resources mapped in the Lower Cretaceous fan sand play, a prolific producer in West
Africa
• The 14 prospects each have mean resources in excess of 150 mmboe which add up to total
resources in excess of 5 billion barrels of oil equivalent
• The 827 mmboe Falcon and 204 mmboe Turtle prospects have been assigned a geological chance
of success of 20-35% by Europa
• Licence attracting interest from a number of operators looking to farm-in
• Shell, ENI, Repsol, Hunt, Chariot, SDX, Sound, Schlumberger and Genel are currently active in
the area
COVID-19
• At the reporting date of 31 July 2020 there was minimal impact from Covid-19 on operations
• Operations have continued at the three production sites
• Brent crude price fell dramatically (with Russia and Saudi Arabia increasing production as the scale
of the pandemic became apparent) but recovered somewhat by period-end
• Directors, London based staff and consultants have been working from home since March 2020,
and agreed a temporary salary/rate cut of 20% since 1 April 2020
• Given the success of home working, the Company has have given notice to terminate the London
office lease from December 2020, which will further cut costs
Financial performance
• Revenue £1.2 million (2019: £1.7 million)
• Pre-tax loss before exploration write-off / write-back £1.2 million (2019: £0.9 million)
• Pre-tax loss of £5.4 million including write-offs taken following relinquishment of Irish licences
(see post period reporting events below) (2019: pre-tax loss £0.7 million)
• Net cash used in operating activities £0.8 million (2019: £0.7 million)
1
• Cash balance: £0.8 million (31 July 2019: £2.9 million)
Board
• Hugh Mackay stepped down as CEO, Simon Oddie was appointed as Interim CEO and Executive
Chairman
• Appointment of Stephen Williams as independent Non-Executive director, replacing Roderick
Corrie
Post reporting period events
• Commencement of site works at Wressle Oil Field
• Appointment of Simon Oddie as CEO on a permanent basis
• Senior Independent Non-Executive Director Mr Brian O’Cathain appointed Non-Executive
Chairman
• Since 1 August 2020 the Board increased the reduction in their salary and fees to 50%
Simon Oddie, CEO of Europa, said: “The award of the Inezgane permit offshore Morocco, the granting
of planning consent for the Wressle Oil Field, the refocus of the Offshore Ireland portfolio onto the proven
gas play of the Slyne Basin following the acquisition of FEL3/19 and the 1.2 tcf Edge prospect – much
progress has been made during the year under review. While the ongoing pandemic and volatility in oil and
gas prices may impact exact timings of planned activity, we are confident that the momentum behind our
various projects will continue to build in the year ahead.
“In Morocco, work carried out to date has seen our team map up to 30 prospects and leads which we
believe, in aggregate, have the potential to hold close to 10 billion barrels of unrisked oil resources. The
size of 50 blocks in the UK North Sea, our Inezgane licence had already attracted the attention of existing
operators in the area and, while there is more work to be done to de-risk the prospectivity further, we are
growing more and more confident that this attention is set to increase as we build a prospect inventory
ahead of the launch of a farm-out. Onshore UK, the Wressle Oil Field remains on track to be brought
online at an initial gross rate estimated at 500bopd in late 2020 following the commencement of site works
in the summer. At this rate and with a c.$18 per barrel breakeven oil price, Wressle will more than double
Europa’s production to over 200bopd and in the process transform the Company’s financial profile.
Offshore Ireland, once the acquisition of FEL 3/19 has been completed, Europa will own 100% of the
most material gas prospects that lie in the same play as Corrib, Ireland’s biggest producing gas field. We
will soon look to launch the farmout of what we view as an unrivalled strategic position in offshore Ireland’s
only gas producing basin.
“Our objective is to expose our shareholders to significant value creating opportunities while minimising
risk. Our UK production, which is set to dramatically increase once Wressle comes online, provides us with
a low risk cash flow generative platform. Our offshore Ireland and offshore Morocco assets, which hold
company-making volumetrics, provide us with multiple opportunities to generate significant value. We also
intend to resume our efforts to add a third leg to our business by securing a late stage appraisal project, once
market conditions improve. Our confidence in Europa’s assets and team remains as high as ever and with
this in mind, I look forward to providing further updates on our progress in the year ahead.”
For further information please visit www.europaoil.com or contact:
Simon Oddie
Christopher Raggett / Simon Hicks /
Tim Harper
Frank Buhagiar / Megan Dennison
Europa
finnCap Ltd
St Brides Partners Ltd
+44 (0) 20 7009 2010
+44 (0) 20 7220 0500
+44 (0) 20 7236 1177
The information communicated in this announcement contains inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
2
Contents
Introduction / Highlights ............................................................................................................................................ 1
Contents ......................................................................................................................................................................... 3
Strategic Report
Chairman's statement ................................................................................................................................................... 4
Our portfolio ................................................................................................................................................................. 6
Our strategy ................................................................................................................................................................... 7
Operations ...................................................................................................................................................................... 8
Risks and uncertainties ............................................................................................................................................... 11
Corporate Governance
Chairman’s introduction to governance .................................................................................................................. 13
Audit Committee Report ........................................................................................................................................... 19
Remuneration Committee Report ............................................................................................................................ 20
Nominations Committee Report .............................................................................................................................. 20
Board of Directors ...................................................................................................................................................... 21
Directors’ report .......................................................................................................................................................... 23
Financial Statements
Statement of Directors’ responsibilities .................................................................................................................. 25
Report of the independent auditor........................................................................................................................... 26
Consolidated statement of comprehensive income .............................................................................................. 32
Consolidated statement of financial position ......................................................................................................... 33
Consolidated statement of changes in equity ......................................................................................................... 34
Company statement of financial position ............................................................................................................... 35
Company statement of changes in equity ............................................................................................................... 36
Consolidated statement of cash flows ..................................................................................................................... 37
Company statement of cash flows ........................................................................................................................... 38
Notes to the financial statements ............................................................................................................................. 39
Directors and advisers ................................................................................................................................................ 64
3
Europa Oil & Gas (Holdings) plc
Chairman's statement
COVID-19, lockdowns, volatile energy markets - the world is a different place to what it was 12 months ago.
Award of the large Inezgane permit offshore Morocco, the pivot to gas offshore Ireland, the granting of planning
permission for the development of the Wressle oil field in North Lincolnshire – Europa is a different junior oil
and gas company to what it was 12 months ago. Today, Europa’s portfolio of multistage licences is exposed to
three jurisdictions: onshore UK, offshore Ireland, and offshore Morocco. Our strategic position offshore Ireland
is now centred around the proven gas play of the Slyne basin and includes 100% interests in two prospects with
the potential to hold 2.7tcf of gas, the most material prospects that lie in the same play as the nearby producing
Corrib field.
The above is in line with our objective to expose shareholders to potentially value creating events while
minimising risk. We intend to achieve this by building a production-based, cash flow generative platform in the
UK which covers both our low cost base as well as exploration activity focused on de-risking prospects to the
point at which partners can be secured to drill high impact wells. While the ongoing pandemic and measures
taken to combat it may affect timings, work streams in line with our corporate objective are underway in all three
of our licence areas. As a result, I am confident that in 12 months’ time, Europa will once again be a different
junior oil and gas company to the one it is today, one which has a financial profile that has been transformed by
the commencement of production at Wressle and one that has a prospect inventory comprised of multiple
company-making targets located in not just one but two jurisdictions.
Onshore UK
Europa produces oil from three fields in the East Midlands. Due to the natural decline of the fields, net
production has been on a downward trajectory for a number of years. Thanks to our active management
programme, production during the 12 months to 31 July 2020 averaged 92boepd, a rate slightly up on the
previous year’s. This is a highly creditable outcome and one which is testament to our excellent operations and
technical teams.
Active management of old fields can only go so far. To achieve a step-change in production, new fields need to
be brought online. Following the granting of planning consent in January 2020, the Wressle Development
Project on licences PEDL180 & 182 in North Lincolnshire, is one such new field which is expected to lead to a
step-change in Europa’s net production. Work is currently underway at the site to bring Wressle into production
at an initial gross rate estimated at 500bopd in late 2020. At this rate, Wressle will more than double Europa’s
existing UK onshore production to over 200bopd. Moreover, production at Wressle is expected to be highly
geared to oil price recovery: a stress testing exercise of the economic model demonstrated that, with an estimated
break-even oil price of US$17.6 per barrel excluding Europa’s corporate overheads, the development plan for
the field is economically robust at today’s oil prices.
While the focus is very much on bringing Wressle online, there are a number of low cost/low risk follow-up
opportunities on PEDLs 180 & 182. During testing at Wressle, a total of 710 barrels of oil equivalent per day
were recovered from three separate reservoirs: the Ashover Grit; the Wingfield Flags; and the Penistone Flags.
Producing reserves in the Penistone Flags at Wressle is one area of development which we, along with our
partners, expect to pursue in the future. PEDL 180 also holds Broughton North, a prospect adjacent to an
historic discovery which was assigned gross mean un-risked prospective resources of 0.6 million boe and a
geological chance of success of ~50% in a CPR. Wressle therefore does not just represent a one-off scaling up
of our production profile, but opens up a series of potential step-ups going forward.
However, in the absence of incremental production from Wressle in 2020, additional funding for the Company
would be required, either via the issuance of new shares, the addition of a layer of debt funding or the sale of
assets. If additional funding were not able to be secured on satisfactory terms, there is a risk that commitments
could not be fulfilled, or that assets may be relinquished.
Offshore Ireland
Even before the Irish Government took the decision in September 2019 to phase out oil but not gas exploration,
our flagship project offshore Ireland was the 1.5 tcf Inishkea gas prospect in Frontier Exploration Licence
(‘FEL’) 4/19. Located in the proven gas play of the Slyne Basin and close to the producing Corrib field and
associated processing facilities, we have long viewed Inishkea as lower risk infrastructure-led exploration
compared to the higher risk unproven plays being targeted elsewhere in the Irish Atlantic Margin. When the
opportunity arose to effectively double up our position in the Slyne for a nominal sum by acquiring a 100%
interest in FEL 3/19, which holds the 1.2 tcf Edge prospect, we acted swiftly.
4
Europa Oil & Gas (Holdings) plc
Following the acquisition, which is subject to regulatory sign-off, Europa will hold 100% interests in the only
two tcf+ prospects which lie in the same gas play that has yielded the Corrib field. Corrib plays an important
role in satisfying Ireland’s energy needs, but the field is in decline. This represents a major opportunity for
Europa. With the Corrib gas field already in decline, nearby existing processing facilities are likely to have spare
capacity in the future, which would potentially have positive implications for development costs. With gas being
viewed by the Irish Government as a key transition fuel as the economy moves towards net zero emissions, the
acquisition will give Europa an unrivalled strategic position, one which has the potential to hold gross unrisked
prospective resources of 2.7 tcf. With the above in mind, our intention is to relaunch the farm-out of our
revamped position in the Slyne Basin once the acquisition of FEL 3/19 has received regulatory sign-off.
The flip side of the rebalance of our Irish portfolio towards gas is the streamlining of the Company’s exposure
to oil plays in the Irish Atlantic Margin. In line with this we have elected to relinquish all exploration licences
offshore Ireland which were targeted on oil rather than gas.
Offshore Morocco
The Inezgane block, which lies offshore Morocco, is at an earlier stage of development when compared to
Europa’s UK and Irish positions having only been awarded the licence in September 2019. This has not however
prevented significant progress being made during the period in terms of building a prospect inventory. In July
2020, we announced that technical work centred around reprocessing and interpreting historic 3D seismic data
had resulted in the mapping of 14 prospects and 16 leads in the Lower Cretaceous play, a prolific producer
elsewhere in West Africa. In aggregate these 30 targets have the potential to hold close to 10 billion barrels of
unrisked oil resources. Two of the targets, the 827 mmboe Falcon and 204 mmboe Turtle prospects, have been
assigned a geological chance of success of 20-35% by Europa.
Work is underway to further de-risk the targets ahead of launching a farm-out to secure partner(s) to drill wells.
Europa continues to maintain dialogue with potential partners, a number of whom expressed an interest in
Inezgane at the time of the award.
Board Changes
Europa’s asset base is not the only area of the business to undergo major change since last year’s Annual Report.
The Board too has seen a change in personnel culminating in my appointment in August 2020 as Non-Executive
Chairman of the Company, replacing Simon Oddie who took on the role of Chief Executive Officer on a
permanent basis. Simon had temporarily assumed this role in November 2019 following the departure of long-
serving CEO Hugh Mackay. These were not the only changes to the Board during the year. In March 2020, we
announced that Roderick Corrie had decided to step down from his position as Non-Executive Director after
12 years, and in July 2020 Finance Director Phil Greenhalgh informed the Board of his intention to retire having
held this role since January 2008. Stephen Williams, Co-CEO of Reabold Resources plc (AIM: RBD), has been
appointed to the Board as an independent Non-Executive Director. Stephen has also agreed to take on the role
of Chairman of the Audit committee, and Senior Independent Director. Following Phil’s departure, the
responsibilities of the Finance Director will for now be divided and assigned to existing members of the Europa
team.
Conclusions
This is my first Chairman’s Statement for Europa. Having previously held the position of senior Non-Executive
Director of the Company, I was of course already very familiar with Europa: with its focus on exposing
shareholders to value creating events while minimising risk; with its asset base which combines stable production
and high impact exploration; with its team, which has done much to increase the industry’s understanding of
Ireland’s various basins and plays.
With Wressle on course to commence production by the end of the year, the rebalancing of our Irish portfolio
towards gas, and the excellent results of ongoing technical work offshore Morocco, I believe I have stepped up
to the role of Chairman at an exciting time in Europa’s development, albeit one that is set against a backdrop
dominated by COVID-19, an unprecedented decline in global demand for oil and gas, and consequently low
commodity prices. However, we know that this business is cyclical, and remain confident that demand and
pricing will recover. The wellbeing of all those involved with Europa is of paramount importance to the Board
and as we advance our various workstreams we will at all times adhere to the prevailing government advice and
guidance.
Finally, on behalf of the Board I would like to thank the management, employees and consultants for their hard
work during what has been and continues to be an unprecedented period for everyone. I look forward to
continuing working with the team in the year ahead as we look to advance all our assets and at the same time
5
Europa Oil & Gas (Holdings) plc
seek to add a late stage appraisal venture to our portfolio so that Europa has exposure to all stages of the oil and
gas cycle.
Mr Brian O’Cathain
Non-Executive Chairman
12 October 2020
Our portfolio
Country
Area
Licence
Ireland
Porcupine
Basin
Slyne Basin
FEL 1/17
FEL 4/19
UK
East Midlands
Morocco Agadir Basin
Field/
Prospect
Ervine, Edgeworth,
Egerton
Inishkea, Corrib
North
Edge
West Firsby
Crosby Warren
FEL 3/19
DL 003
DL 001
PL 199/215 Whisby-4
PEDL180
PEDL181
PEDL182
PEDL299
PEDL343
Inezgane
Wressle
Broughton North
Hardstoft
Cloughton
Falcon & Turtle
Operator
Equity
Status
Europa
Europa
100% Exploration
100% Exploration
Europa
Europa
Europa
BPEL
Egdon
Europa
Egdon
Ineos
Third Energy
Europa
100%1 Exploration
99% Production
100% Production
65% Production
30% Development2
50% Exploration
30% Exploration
25% Field
rejuvenation
35% Appraisal
75% Exploration
1 Subject to approval
2 Reported as an exploration asset pending approval of the development by the OGA
6
Europa Oil & Gas (Holdings) plc
Our strategy
Our strategy
Europa's objective is to create a significant liquidity event for its shareholders through successful drilling of its
high impact exploration portfolio, and discovery of oil and gas. In parallel with this, we need appropriate balance
in the portfolio from the appraisal, development and production parts of the business cycle and our new ventures
strategy is now focused exclusively on opportunities in this area.
Our area of interest is the Atlantic seaboard, north Africa and north west Europe. We are prepared to evaluate
and acquire quality assets wherever they become available provided that they are in countries that have low
political, regulatory and security risks and have
together with
acceptable commercial terms.
licensing processes
transparent
Strategy committee
Following a review by the Board in late 2018 a dedicated Board Strategy Committee was formed to ensure
delivery of the strategy.
SG Oddie took over as chair of the committee following HG Mackay’s stepping down at the end of 2019. CW
Ahlefeldt-Laurvig and BJ O’Cathain are members. The committee met every month until February 2020
reviewing opportunities, recommendations and deal flow. Meetings were then temporarily suspended as a result
of the pandemic and need to conserve cash.
7
Europa Oil & Gas (Holdings) plc
Operations
Operational review
UK Production - East Midlands
Europa produces oil from three UK onshore fields: West Firsby; Crosby Warren; Whisby-4. During the financial
year ended 31 July 2020, an average of 92boepd were recovered from the three fields. This is a similar
performance to the previous 12 month period and is testament to the Company’s ongoing active management
of the three fields which is focused on maximising production.
A 1% interest in the West Firsby licence was assigned to FourTrees Energy Limited following the successful
workover of the WF6 well.
UK Development – Wressle Oil Field
Planning consent for the development of Wressle in North Lincolnshire, which lies on licences PEDL180 &
182 (‘the Licences’), was granted on 17 January 2020. Under the development plan, Wressle is expected to
commence production at an initial gross rate of 500bopd from the Ashover Grit formation. As well as more
than doubling Europa’s existing UK onshore production to over 200bopd, oil recovered from Wressle is
expected to be highly profitable. In March 2020, the Company announced the results of a stress testing exercise
of the economic model undertaken by the operator Egdon Resources in light of the current low oil price
environment. The results demonstrate that, with an estimated break-even oil price of US$17.6 per barrel
(excluding Europa’s corporate overheads), the development plan for the field is economically robust at today’s
oil price levels.
Wressle is expected to be brought online late 2020. Work at the site is underway in line with the development
plan which is comprised of a number of key stages. These along with work carried out to date are listed below:
• Key planning conditions have been discharged, detailed design tendering is underway and all HSE
documentation and procedures are progressing in line with expectations
• Four groundwater boreholes have been installed and two rounds of sampling and analysis undertaken
to date
• Reconfiguration of the site - Site works are underway
•
Installation and commissioning of surface facilities
• Sub-surface operations
• Commencement of production
The civil works contractor has commenced works to reconfigure the Wressle production area. Works being
undertaken include the installation of a new High Density Polyethylene impermeable membrane; a French drain
system; an approved surface water interceptor; the construction of a purpose-built bund area for storage tanks;
a tanker loading plinth; and an internal roadway system.
Europa holds a 30% working interest in the Licences alongside Egdon Resources (operator, 30%), and Union
Jack Oil (40%). The Wressle Oil Field was discovered by the Wressle-1 well in 2014. During testing, a total of
710 barrels of oil equivalent per day were recovered from three separate reservoirs: the Ashover Grit; the
Wingfield Flags; and the Penistone Flags. In September 2016, a Competent Person’s Report provided
independent estimates of reserves and contingent and prospective oil and gas resources for the Wressle discovery
of 2.15 million stock tank barrels classified as discovered (2P+2C). There is additional development potential
on the Licences including Broughton North, a low risk exploration prospect lying on the footwall side of a fault,
adjacent to the historic Broughton-B1 discovery made by BP in 1984 which the CPR assigned gross mean un-
risked prospective resources of 0.6 million boe and a geological chance of success of 49% for the Penistone
Flags and 40% for the Ashover Grit. Further development of the Wressle field, including producing additional
reserves existing in the Penistone Flags formation, is expected in the future.
During the period, £403,000 was received from North Lincolnshire Council (‘NLC’) in settlement of gross costs
incurred by the partners in relation to the appeal process. This followed a favourable ruling by the Planning
Inspector regarding Egdon’s application for costs against NLC when planning consent for Wressle was granted
on appeal on 17 January 2020. The gross sum has been divided between the partners in Wressle proportionate
with their interests. As a result, Europa received £120,900.
Exploration: Offshore Ireland
During the period, the Company took the decision to rebalance its portfolio of offshore Ireland licences in
favour of gas, specifically the proven gas play in the Slyne Basin which is home to the producing Corrib gas field.
8
Europa Oil & Gas (Holdings) plc
The Company regards this as lower risk infrastructure exploration due to the close proximity of Corrib and
associated processing facilities. Furthermore, Europa’s flagship project is the nearby 1.5tcf Inishkea gas
prospect.
In line with the above, in June 2020 the Company announced the acquisition of a 100% interest in Frontier
Exploration Licence (‘FEL’) 3/19 from DNO. FEL 3/19, which holds the 1.2 tcf Edge prospect, lies close to
Corrib and Europa’s 100% owned FEL 4/19 which holds the 1.5 tcf Inishkea prospect. The directors believe
the acquisition, which is subject to regulatory sign-off, will provide Europa with a key strategic position in the
proven gas play of the Slyne Basin. FEL3/19 was formerly the LO16/23 block which DNO acquired following
the acquisition of Faroe Petroleum. In 2016, CNOOC farmed into the block, acquiring an 80% interest and
operatorship. CNOOC has since exited and having assumed CNOOC’s 80% interest, DNO is now selling 100%
of the licence to Europa for a nominal upfront fee.
In tandem with the acquisition of FEL 3/19, the Company has elected to reduce its position in more early stage
and prospective areas of the Irish Atlantic Margin where the primary target is oil. This decision was taken
following the Irish Government’s announcement in September 2019 of its intention to phase out oil but not gas
exploration. In line with this and in addition to the acquisition of FEL 3/19, during the period the Company
announced the relinquishment of four licences in the South Porcupine Basin where the primary target was oil.
FEL 1/17 has not yet been relinquished pending a possible evaluation of gas potential. Following these changes,
Europa’s Irish portfolio consists of three FELs with combined gross prospective resources of 2.7tcf of gas and
gross mean un-risked prospective resources of 3.9 billion barrels oil equivalent.
Subject to the approval of the acquisition of FEL 3/19 by the Irish authorities, the forward plan for Ireland is
to launch a farm-out process for both licences which combined have company-making gross unrisked
prospective resources of 2.7 tcf. In tandem with ongoing farm-out discussions, the site survey process for a
drilling location at Inishkea continues to be advanced.
Further to the application to relinquish of licences LO16/19, LO16/22, FEL2/13 and FEL 3/13, and the
pending situation on FEL 1/17 the decision has been taken to write off the value of these intangible assets,
resulting in a non-cash charge to income of £4,004,000.
Exploration: Offshore Morocco
In September 2019, Europa was awarded a 75% interest in and operatorship of the Inezgane Offshore licence
with the remaining 25% interest held by the Moroccan regulator, ONHYM (Office National des Hydrocarbures
et des Mines). Covering an area of 11,228 sq km, Inezgane is the equivalent of approximately 50 UKCS North
Sea blocks, or over half the size of Wales. Europa’s focus is on the Lower Cretaceous fan sand play, which is a
prolific play in West Africa but is highly under-explored offshore Morocco. Out of just 10 wells that have been
drilled in deepwater Morocco to date, only three have penetrated a complete Lower Cretaceous section. Despite
this Europa has identified all the key elements of source (including the world class Cenomanian-Turonian source
rock), reservoir and seal within the Inezgane licence.
The licence period commenced in November 2019 and since then work has been focused on reprocessing and
interpreting historic seismic data to de-risk large prospects in the Lower Cretaceous play. Initial results have
been highly encouraging. To date, 14 prospects and 16 leads have been mapped, which the Company estimates
have the potential to hold in aggregate close to 10 billion barrels of unrisked oil resources. All the identified
prospects have mean resources in excess of 150 mmboe which taken together add up to total resources in excess
of 5 billion barrels of oil equivalent. The prospects have stacked reservoir potential and include a wide range of
structural styles including for example 4-way dip closure in the case of the 827 mmboe Falcon and 204 mmboe
Turtle prospects. Europa has assigned a geological chance of success to these prospects of 20-35%. In addition,
examples of shallow gas anomalies have been seen on seismic data which is a positive indication of a working
petroleum system operating in the basin.
Ongoing work is focused on further de-risking these prospects and leads while the forward plan is to build a
robust prospect inventory and, subject to the results, secure partner(s) to drill wells. A farm-out process will be
formally launched shortly, however the Company has maintained dialogue with three companies, all of whom
have expressed interest in Inezgane.
A number of other oil and gas companies are currently active in this area of Morocco, notably Shell, ENI,
Repsol, Hunt, Chariot, SDX, Sound, Schlumberger and Genel.
The Inezgane Permit is of 8-years duration comprising three phases of which the Initial Phase of the licence
comprises 2-years. The Initial Phase includes 3D seismic reprocessing as well as other technical studies. At the
end of the Initial Phase, Europa has the option to commit to drilling an exploration well in the Second Phase of
the licence or to relinquish the licence.
9
Europa Oil & Gas (Holdings) plc
Financials
Revenue was £1.2 million (2019: £1.7 million). The average oil price achieved was US$48.0/bbl (2019:
US$66.7/bbl) and the average Sterling exchange rate was US$1.27 (2019: US$1.29). An average of 92 boepd
(2019: 91 boepd) was recovered from our three UK onshore fields. Production was down at West Firsby,
relatively flat at Crosby Warren, but increased at Whisby.
Stringent cost controls continue to be implemented. Cost of sales was £1,438,000 (2019: £1,682,000).
Administrative expenses of £823,000 (2019: £811,000) included £81,000 on new licence evaluations (2019:
£102,000).
Net cash spent on operating activities was £844,000 (2019: cash spent £661,000).
Purchase of intangible fixed assets of £1,148,000 (2019: £1,973,000) was spent advancing the portfolio.
The Group’s cash balance at 31 July 2020 was £0.8 million (31 July 2019: £2.9 million), sufficient to fund
Europa’s share of the Wressle development.
Non-financial Key Performance Indicators (‘KPIs’)
There were no reportable accidents or incidents in the year (2019: zero).
One new licence, the Morocco Inezgane Offshore exploration permit, was signed in the year. (2019: zero).
Conclusion and Outlook
Despite the disruption caused by the ongoing pandemic, much has been achieved across Europa’s asset base
during the year. As a result, the foundations are in place for further progress to be made in the year ahead
starting with first production at Wressle. As well as doubling Europa’s net production to over 200boepd,
bringing the field on stream will open up a number of low risk opportunities on the licence to build production
further. By scaling up Europa’s internally generated revenues and cash flows, Wressle will put the Company in
a strong position to pursue these follow-up opportunities. In the absence of incremental production from
Wressle in 2020 additional funding for the Company would be required, either via the issuance of new shares,
the addition of a layer of debt funding or the sale of assets. If additional funding were not able to be secured on
satisfactory terms, there is a risk that commitments could not be fulfilled, or that assets may be relinquished.
Outside the UK, farm-out will be the focus. Offshore Ireland, a farm-out of Europa’s strategic position in the
Slyne Basin will be launched once the acquisition of FEL3/19 has been approved. With combined gross
prospective resources of 2.7 tcf and located close to the producing Corrib gas field, the Board believes FELs
3/19 and 4/19 represent a compelling investment opportunity and remains confident that one or more partners
will be secured to take these licences forward. Offshore Morocco, once technical work has been completed to
de-risk what is a sizeable prospect inventory, a farm-out will be launched, although discussions have been taking
place with interested parties on an informal basis ever since Inezgane was awarded to Europa.
Outside our existing portfolio, the Board remains keen to add a third leg to the business, specifically a late stage
appraisal project to complete Europa’s exposure to the full oil and gas cycle. While COVID-19 has delayed this
process, together with volatile oil and gas markets, it may yet generate opportunities as assets are divested that
may have not warranted Europa’s serious attention prior to the onset of the pandemic. Importantly, once
Wressle is in production, Europa will have a much-improved financial profile with which to secure a new venture
and further build the Company.
Qualified Person Review
This release has been reviewed by Rowland Thomas, geophysical advisor to Europa, who is a geophysicist with
over 39 years' experience in petroleum exploration and a member of the Society of Exploration Geophysicists,
European Association of Geoscientists and Engineers and the Petroleum Exploration Society of Great Britain,
and has consented to the inclusion of the technical information in this release in the form and context in which
it appears.
Simon Oddie
CEO
12 October 2020
10
Europa Oil & Gas (Holdings) plc
Risks and uncertainties
Europa’s activities are subject to a range of financial risks including commodity prices, liquidity, exchange rates
and loss of operational equipment or wells. These risks are managed with the oversight of the Board and the
Audit Committee through ongoing review, considering the operational, business and economic circumstances
at that time. The primary risk facing the business is that of liquidity.
Mitigation
Switched to home working
wherever possible. Operations
staff designated as key-workers,
kept to separate bubbles.
Able to maintain key services and
full compliance with permits
through lockdown.
Detailed cash forecasts are
prepared frequently and reviewed
by management and the Board.
The Group’s production provides
a monthly inflow of cash and is
the main source of working
capital and project finance.
Additional cash is available
through the placing of Europa
shares in the market and the
trading of assets.
The Board has considered the use
of financial instruments to hedge
oil price and US Dollar exchange
rate movements. To date, the
Board has not hedged against
price or exchange rate
movements but intends to
regularly review this policy.
Other refineries are know to
Europa
Current production comes from
five oil wells located at three
different sites. This diversity of
producing assets gives Europa
resilience in the event of a
problem with one well or site.
Appropriate insurance is obtained
annually which covers some of
Europa’s exploration,
development and production
activities.
Key risk
Description and impact
Employees and consultants health.
Safety of operations and compliance with permits.
COVID-19
Funding
Significant expenditure is required to establish the extent of
oil and gas reserves through seismic surveys and drilling and
there can be no certainty that oil and gas reserves will be
found.
Licences may be revoked by the relevant issuing authority if
commitments under those licences are not met. Further
details of current licence commitments are given in notes 11
and 23, also note comments on going concern in the
Operations Review and note 1.
Commodity
price and
foreign
exchange
Each month’s oil production is sold at a small discount to
Brent price in US Dollars. These funds are matched where
possible against expenditures within the business. As most
capital and operating expenditures are Sterling denominated,
US Dollars are periodically sold to purchase Sterling. A fall in
oil price could make some projects economically unviable.
Customer
Exploration,
drilling and
operational
All oil production is sold to one UK based refinery – if they
were to stop buying Europa’s crude, additional transportation
costs would be incurred.
The business of exploration and production of oil and gas
involves a high degree of risk. Few prospects that are explored
are ultimately developed into producing oil and gas fields.
There are numerous risks inherent in drilling and operating
wells, many of which are beyond the Company’s control.
Operations may be curtailed, delayed or cancelled as a result of
environmental hazards, industrial accidents, occupational and
health hazards, technical failures, weather, reservoir pressures,
shortage or delays in the delivery of rigs and other equipment,
compliance with governmental
labour disputes
requirements.
and
Drilling may involve unprofitable efforts, not only with respect
to dry wells, but also to wells which, though yielding some oil
or gas, are not sufficiently productive to justify commercial
development. Completion of a well does not assure a profit on
the investment or recovery of drilling, completion and
operating costs.
11
Europa Oil & Gas (Holdings) plc
Securing planning consent for onshore wells takes time and the
outcome of planning applications is not certain.
The Group engages planning and
legal specialists in the field.
Planning
risk
On behalf of the Board
P Greenhalgh, Finance Director
12
Europa Oil & Gas (Holdings) plc
Chairman’s introduction to governance
How we govern the Group
As Chairman of Europa Oil & Gas (Holdings) plc, it is my responsibility to ensure that the Board is performing
its role effectively and has the capacity, ability, structure and support to enable it to continue to do so.
The information on Corporate Governance set out below and on the website www.europaoil.com is, in the
opinion of the Board, fully in accordance with the revised requirements of AIM Rule 26.
The Board has determined that the Quoted Companies Alliance (QCA) Corporate Governance Code for small
and mid-size quoted companies is the most appropriate for the Group to adhere to.
The QCA Code is constructed around 10 broad principles and a set of disclosures. The QCA has stated what it
considers to be appropriate arrangements for growing companies and asks companies to provide an explanation
of how they are meeting the principles through the prescribed disclosures. We have considered how we apply
each principle to the extent that the Board judges these to be appropriate in the circumstances, and below we
provide an explanation of the approach taken in relation to each. The Board considers that it does not depart
from any of the principles of the QCA Code during the period under review.
The last 12 months have seen, amongst others, the following governance developments:
• SG Oddie, and BJ O’Cathain met with major shareholders
• A Board evaluation review in September 2019, the main action points arising being:
o To address gender diversity
o To improve perceptions of director independence
For the purposes of clarity, the description of how the Group complies with the 10 principles of the QCA Code
begins with a summary of those areas where the Group does not fully comply, followed by a review of each of
the principles in turn.
Principle 6:
Action
The Board has resolved to look for a female member at the next
opportunity to add or replace a Director. Appointment will be on merit.
Ensure that between them the
Directors have the necessary up-to-
date experience, skills and
capabilities
The Board should understand and
challenge its own diversity,
including gender balance, as part of
its composition.
Review of each of the QCA principles
Principle 1:
Our strategy is described here:
Establish a strategy and business
model which promote long-term
value for shareholders
http://www.europaoil.com/strategy.aspx
Also note:
•
In January 2019 following a review of strategy led by BJ O’Cathain,
the Board resolved to establish a Strategy Committee to provide
support to the executive in implementing the strategy.
• The Strategy Committee met five times in 2019-20
• Strategy is assessed by discussion between the Directors
• An external strategy session is not considered useful.
13
Europa Oil & Gas (Holdings) plc
Principle 2:
The Company engages with shareholders by:
Seek to understand and meet
shareholder needs and expectations
• Publishing periodic newsletters
• Emailing Regulatory News Service (RNS) announcements to its
subscriber list
• Replying to investor questions sent to mail@europaoil.com either
directly or through St Brides Partners Limited
• Proactive Investor presentations and interviews (made available on
the website by links to Youtube recordings)
• Conducting at least twice-yearly meetings with major shareholders
on its results roadshows to obtain a balanced understanding of
their issues and concerns
Shareholder liaison is the responsibility of the CEO and Chairman, with
assistance from the Finance Director and the SID.
At the last AGM, voting did not indicate any specific shareholder concerns.
Principle 3:
Key stakeholders are:
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term success
• Regulators (OGA, DCCAE (Department of Communications,
Climate Action and Environment (Ireland)), ONHYM (Office
National des Hydrocarbures et des Mines), EA, HSE, Local
Authorities)
• Host Governments
• Local communities
• Partners and Co-venturers
• Employees and consultants
• Phillips 66, (who purchase our produced crude oil)
The CEO provides a weekly report to the Board which includes a section
on Stakeholder and Social Responsibility. This includes stakeholder
feedback from multiple sources.
Europa is a member of the UK Onshore Operator Group (‘UKOOG’) and
through this forum has regular meetings with the EA and HSE.
Engagement with UKOOG has helped improve our submissions to
various regulatory authorities.
Europa is a member of the Irish Offshore Operators’ Association
(‘IOOA’) which has been highly active in promoting the need for oil and
gas exploration in Ireland.
The finance department prepares a risk register for the Group that
identifies key operational and financial risks. All members of the Board are
provided with a copy of the register. The register is reviewed at least
annually and is updated as and when necessary.
The Audit Committee monitors the integrity of the financial statements
and related announcements, reviews the Company’s internal control
processes and risk management systems, and reports its conclusions to the
Board. The committee regularly reviews the effectiveness of the Company’s
systems and risk management.
Within the scope of the annual audit, specific financial risks including
foreign currency, interest rates, liquidity and credit are evaluated in detail.
14
Principle 4:
Embed effective risk management,
considering both opportunities and
threats, throughout the
organisation
Europa Oil & Gas (Holdings) plc
All members of staff and contractors are provided with a handbook which
includes sections on share dealing, bribery and whistleblowing. The
handbook is updated and reissued regularly.
We do not currently have a risk management framework, a risk
management improvement programme a risk training programme,
workshops, risk appetite or monitoring dashboard but will review if any of
these would be beneficial in the coming year.
Principle 5:
All of the three NEDs are considered by the Board to be independent.
Maintain the Board as a well-
functioning, balanced team led by
the chair
Biographies are available at:
http://www.europaoil.com/Directors.aspx
Two of the Board’s Non-Executive Directors, SA Williams and BJ
O’Cathain, hold share options. Whilst recognising that the granting of
options to Non-Executive Directors can be deemed to compromise
independence in accordance with the principles of the QCA Corporate
Governance Code, the Board views this to be part of a balanced
remuneration package to attract and retain high quality candidates and
considers the numbers of options to have no effect upon the independence
of these Directors as the sums are insignificant in the context of the
individual’s financial circumstances.
One of the Board’s Non-Executive Directors, CW Ahlefeldt-Laurvig, has
been a member for more than the nine years recommended by the QCA
Corporate Governance Code and holds 7.6% of the Group’s shares. The
Board believes him to be independent in character and free from any other
relationship that could affect his independent judgement. This is
demonstrated by his objective and active contribution in Board meetings
and their voting record.
The appointment of SA Williams in March 2020 compensated somewhat
for his seniority and reduced the average tenure of the Board. Directors
serving more than six years will continue to be proposed for re-election at
each AGM.
SG Oddie (CEO) and P Greenhalgh (FD and Company Secretary) are full
time employees.
BJ O’Cathain (Non-Executive Chairman), SA Williams and CW Ahlefeldt-
Laurvig (all Non-Executive Directors) are all expected to devote such time
as is necessary for the proper performance of their duties including
attendance at seven Board meetings per year, the AGM, and Board
committee meetings.
The minimum numbers of meetings for committees are: Audit Committee
– two; Remuneration Committee – one; and Nominations Committee -
one. Meetings held and attendance records of all Directors for the period 1
August 2019 to 31 July 2020 are set out below.
The Board is balanced in terms of experience, and the split between
Executive and Non-Executive Directors.
All Board and Board committee members received agenda and associated
papers a few days in advance of meetings.
Members of the Board of Directors are listed at
http://www.europaoil.com/Directors.aspx
including their relevant experience, skills and personal qualities. There is an
appropriate breadth of experience covering the key aspects of the business
including technical, operational, financial and international. The gender
balance needs to be addressed and is under consideration. It is the
responsibility of each Director to keep skills up to date with the assistance
15
Principle 6:
Ensure that between them the
Directors have the necessary up-to-
date experience, skills and
capabilities
Europa Oil & Gas (Holdings) plc
of the Chairman who has a core responsibility in addressing the
development needs of the Board as a whole with a view to enhancing its
overall effectiveness.
Board Committees call on external advisers where this is deemed necessary.
No significant matters of a corporate governance nature arose during the
period covered by the 2020 Annual Report nor subsequently to the date of
this statement on which it was considered necessary for the Board or any
of its committees to seek specific external advice, although the Board
consults with its Nominated Adviser and other professional advisers on
routine matters arising in the ordinary course of its business.
The main internal advisory functions are those of Senior Independent
Director and Company Secretary (shared with the Finance Director
function).
New Directors receive training from the Company Nominated Adviser and
broker.
Principle 7:
Evaluate Board performance based
on clear and relevant objectives,
seeking continuous improvement
The second effectiveness review utilising a PwC developed assessment tool
was undertaken during the year. Each Director fed back to the Chairman
and results were assimilated and considered at the following Board meeting.
The main areas requiring attention were:
• Gender diversity
• Board member independence (given the tenure of two long-serving
NEDs, one of whom has since been replaced)
It had been planned that the third review (to be undertaken later in 2020)
would involve third party facilitation of the process – but due to the
pandemic, this has been postponed and an internal review will be
conducted.
Principle 8:
Promote a corporate culture that is
based on ethical values and
behaviours
Members of the Board are committed to observing and promoting the
highest standards of ethical conduct in the performance of their
responsibilities on the Board of Europa. The Board believes that a culture
that is based on the highest ethical standards provides a competitive
advantage and is consistent with fulfilment of the Group’s strategy.
Board meetings are held usually at the head office and once a year at one of
the production sites. Directors are encouraged to spend time with, listen to,
and act upon any concerns of, staff members and contractors.
• The Board considers that cultural differences between UK and
Ireland are not material.
• We do not have a culture policy, nor a specific culture related
employee training / induction programme but resolve to review
the need for such a programme annually.
• Culture and strategy are deeply aligned.
• The Board ensures that the Company has the means to determine
that ethical values and behaviours are recognised and respected.
Role of the Chairman – BJ O’Cathain (from 4 August 2020, previously SG
Oddie)
• Runs the Board and sets its agenda.
• Promotes the highest standards of corporate governance.
• Ensures that the members of the Board receive accurate, timely and
clear information, to promote the success of the Group.
• Ensures effective communication with shareholders.
16
Principle 9:
Maintain governance structures and
processes that are fit for purpose
and support good decision making
by the Board
Europa Oil & Gas (Holdings) plc
• Takes the lead in identifying and meeting the development needs of
individual Directors, ensuring that the performance of individuals and
of the Board as a whole and its committees is evaluated at least once a
year.
Role of the CEO – SG Oddie (from 21 November 2019, previously HGD
Mackay)
• Develops Group objectives and strategy
• Executes strategy following approval by, the Board.
• Identifies and executes licence acquisitions and disposals, joint venture
opportunities, approves major work programmes.
• Leads geographic diversification initiatives.
• Identifies and executes new business opportunities outside the current
core activities.
• Manages the Group’s risk profile, including the health and safety
performance of the business, in line with the extent and categories of
risk identified as considered acceptable by the Board.
Role of the SID – SA Williams (from 4 August 2020, previously BJ
O’Cathain from 12 March 2020, previously RJHM Corrie).
• Works closely with the Chairman, acting as a sounding board and
providing support.
• Acts as an intermediary for other Directors as and when necessary.
• Is available to shareholders and other Non-Executives to address any
concerns or issues they feel have not been adequately dealt with
through the usual channels of communication.
• Meets at least annually with the Non-Executives to review the
Chairman’s performance and carrying out succession planning for the
Chairman’s role.
• Attends sufficient meetings with major shareholders to obtain a
balanced understanding of their issues and concerns.
Role of the Company Secretary – Phil Greenhalgh
Given Europa’s size and desire to manage its resources effectively, the role
of Company Secretary is performed by the Finance Director. The Board
reviews this structure at least annually.
• Distributes documents to the Board.
• Is available to the Audit, Remuneration, Nominations and Strategy
Committees as required.
• Keeps minutes of meetings.
• Updates Companies House records for the Company and subsidiaries.
Committee Terms of Reference and Matters Reserved for the Board are
available at: http://www.europaoil.com/corporatedocuments.aspx
The Board intends to continuously review its governance framework in line
with the Company’s plans for growth.
Principle 10:
Communicate how the company is
governed and is performing by
maintaining a dialogue with
SG Oddie and BJ O’Cathain met major shareholders (note SG Oddie was
Interim CEO and Executive Chairman)
The Audit Committee met to review the interim and preliminary accounts
for the Group and held meetings with the external auditor without
executives present.
17
Europa Oil & Gas (Holdings) plc
shareholders and other relevant
stakeholders
The Remuneration Committee met four times during the year to review
remuneration and incentives.
During the year the Company has focused on advancing its portfolio
towards drilling and looked at new asset opportunities.
Past Notice of AGMs are available at
http://www.europaoil.com/reportsandpresentations.aspx
Board
The Board is responsible for the overall governance of the Company. Its responsibilities include setting the
strategic direction of the Company, providing leadership to put the strategy into action and to supervise the
management of the business.
The Board comprises three Non-Executive Directors (‘NEDs’), the CEO and Finance Director. Biographies of
the Directors are on pages 24-25. All NEDs are considered by the Board to be independent. The roles and
responsibilities of the Chairman, CEO, Senior Independent Director (‘SID’) and Company Secretary are set out
on the website and summarised below.
BJ O'Cathain is Non-Executive Chairman, SA Williams is the SID, CW Ahlefeldt-Laurvig is NED.
Terms of Reference
The Terms of Reference of all Board Committees are available on the website.
Record of meetings
Meetings held and attendance records of all Directors for the period 1 August 2019 to 31 July 2020 are set out
below:
Board
Attended
/Possible
6 / 6
6 / 6
4 / 4
6 / 6
2 / 2
2 / 2
6 / 6
Audit
Committee
Attended
/Possible
2 / 2
2 / 2
1 / 1
2 / 2
1 / 1
Remuneration
Committee
Attended
/Possible
4 / 4
4 / 4
3 / 3
4 / 4
Nominations
Committee
Attended
/Possible
1 / 1
1 / 1
1 / 1
1 / 1
1 / 1
3 / 3
1 / 1
Strategy
Committee
Attended
/Possible
5 / 5
5 / 5
5 / 5
4 / 4
SG Oddie
CW Ahlefeldt-Laurvig
RJHM Corrie
BJ O'Cathain
HGD Mackay
SA Williams
P Greenhalgh
BJ O’Cathain
Chairman
18
Europa Oil & Gas (Holdings) plc
Audit Committee Report
The Audit Committee meets twice a year and is chaired by SA Williams (since 12 March 2020, previously RJHM
Corrie). CW Ahlefeldt-Laurvig and BJ O’Cathain are members. During the year, the committee has reviewed:
Internal financial controls systems and other internal control and risk management systems;
•
• The statements to be included in the annual report concerning internal control, risk management and
the going concern statement;
• The carrying values of the producing and intangible assets;
• The adequacy and security of the Company’s arrangements for its employees and contractors to raise
concerns about possible wrongdoing in financial reporting or other matters;
• The procedures for detecting fraud;
• The systems and controls for the prevention of bribery;
• The need for an internal audit function.
The committee has overseen the relationship with the external auditor, including:
• Approved their remuneration for audit and non-audit services;
• Approved their terms of engagement and the scope of the audit;
• Satisfied itself that there are no relationships between the auditor and the Company which could
adversely affect the auditor’s independence and objectivity;
• Monitored the auditor’s processes for maintaining independence, its compliance with relevant UK law,
regulation, other professional requirements and the Ethical Standard, including the guidance on the
rotation of audit partner and staff;
• Assessed the qualifications, expertise and resources, and independence of the external auditor and the
effectiveness of the external audit process;
• Evaluated the risks to the quality and effectiveness of the financial reporting process in the light of the
external auditor’s communications with the committee;
• Met with the external auditor without management being present, to discuss the auditor’s remit and any
issues arising from the audit;
• Discussed with the external auditor the factors that could affect audit quality and reviewed and approved
the annual audit plan, ensuring it is consistent with the scope of the audit engagement, having regard to
the seniority, expertise and experience of the audit team.
The committee reviewed the findings of the audit with the external auditor, including:
• A discussion of issues which arose during the audit, including any errors identified during the audit; and
the auditor’s explanation of how the risks to audit quality were addressed;
• Key accounting and audit judgements;
• The auditor’s view of their interactions with senior management;
• A review of any representation letters requested by the external auditor before they were signed by
management;
• A review of the management letter and management’s response to the auditor’s findings and
recommendations;
• A review of the effectiveness of the audit process, including an assessment of the quality of the audit,
the handling of key judgements by the auditor, and the auditor’s response to questions from the
committee.
SA Williams
Audit Committee Chair
19
Europa Oil & Gas (Holdings) plc
Remuneration Committee Report
The Remuneration Committee reviews the scale and structure of the Executive Directors' remuneration and the
terms of their service contracts. The remuneration and terms and conditions of appointment of the Non-
Executive Directors are set by the Board.
BJ O’Cathain chairs the committee. CW Ahlefeldt-Laurvig and SA Williams are members. The Remuneration
Committee met four times in the year.
In setting the remuneration for the Executive Directors and key staff, the Committee compares published
remuneration data for other AIM and Main LSE Board oil and gas companies of a similar market capitalisation
and seeks to ensure that the remuneration of the Executive Directors is broadly comparable to their peers in
other similarly sized organisations. In 2019-20:
• There were no changes to remuneration policy, pension rights and any compensation payments.
• Directors, London based staff and consultants agreed to work from home since March 2020, and agreed
a temporary salary/rate cut of 20% since 1 April 2020.
• There were no other changes to pay and employment conditions across the Company or Group, and
no salary increases.
• An executive bonus scheme was agreed and implemented, but this was suspended when salaries were
cut.
Brian O’Cathain
Remuneration Committee Chair
Nominations Committee Report
The Nominations Committee reviews the size, structure and composition of the Board and considers succession
planning. The committee identifies and nominates candidates to fill Board vacancies for approval of the Board.
SG Oddie chairs the committee. CW Ahlefeldt-Laurvig and BJ O’Cathain are members. The Nominations
Committee met once in 2019-20.
•
It was re-iterated that we would look for a female Board member at the next opportunity.
• The splitting of the FD and Company Secretary roles was not considered necessary given the current
workload.
• The committee reviewed succession planning and agreed who would step into senior roles in the event
of an emergency.
• The time commitment required of the NEDs was considered to be appropriate.
Brian O’Cathain
Nominations Committee Chair
20
Europa Oil & Gas (Holdings) plc
Board of Directors
Members of the Board of Directors are listed below, including their relevant experience, skills and personal
qualities. There is an appropriate breadth of experience covering the key aspects of the business including
technical, operational, financial and international. The gender balance needs to be addressed and is under
consideration. It is the responsibility of each Director to keep skills up to date with the assistance of the
Chairman who has a core responsibility in addressing the development needs of the Board as a whole with a
view to enhancing its overall effectiveness.
Board Committees call on external advisers where this is deemed necessary. During 2019-20 this has not been
required.
The main internal advisory functions are that of Senior Independent Director (SA Williams) and Company
Secretary (P Greenhalgh, also Finance Director), whose backgrounds are described below.
SG Oddie, CEO
Simon has over 40 years of relevant experience as a petroleum engineer, technical consultant, manager and
investment adviser in upstream oil and gas. He has worked with Schlumberger, ERC Energy Resource
Consultants, Enterprise Oil and Gemini Oil and Gas Advisors LLP.
He was CEO of Enterprise Italy during its first operated exploration drilling both on and offshore. Simon more
recently was the architect of the Gemini Oil and Gas royalty funds where he established a solid track record in
fundraising, investor relations, and origination, evaluation and execution of oil and gas deals.
He has completed the Advanced Management Program (AMP 155) at Harvard Business School, holds an MSc.
in Petroleum Engineering from Imperial College and a BSc (First Class) in Electronics from Manchester
University. Simon keeps his skills up-to-date through consultancy and participation in key professional societies,
industry groups, and seminars.
Committees: R N S (chair of the Strategy Committee)
BJ O’Cathain, Non-Executive Chairman
Brian has worked as a geologist and petroleum engineer in the oil and gas sector since 1984. He began his career
with Shell International and worked at Enterprise Oil and Tullow Oil in senior roles. He served as CEO of
Afren plc to 2007, and as CEO of Petroceltic International plc, until 2016. He was a Non-Executive Director
of Eland Oil and Gas, an AIM listed company producing over 20,000 bopd in Nigeria, until its successful sale
to Seplat plc in December 2019. He is also a Non-Executive Director of Nephin Energy, a private gas producing
company which is the largest equity holder in the Corrib Gas Field in Ireland. Nephin Energy is a 100%
subsidiary of Canadian Pension Plan Investment Board, one of the world’s largest Pension Funds with assets of
$434 billion under management.
His skills include market understanding, fund-raising, and the technical, legal and financial aspects of running a
publicly listed Oil and Gas company. He led and negotiated the agreed nil-premium merger of Petroceltic and
Melrose Resources in 2012.
He holds a BSc (First Class) in Geology from the University of Bristol. Brian keeps his knowledge and awareness
current by participation in industry conferences, IOD workshops, and by networking with other directors and
executives in the Oil and Gas industry.
Committees: A R N S (chair of the Remuneration and Nomination Committee)
P Greenhalgh, Finance Director & Company Secretary
Phil graduated from Imperial College with a BEng in chemical engineering and subsequently became a member
of the Chartered Institute of Management Accountants.
He began his financial career as Financial Controller with Kelco International, a subsidiary of Merck & Co. He
moved to Monsanto plc before becoming Finance Director of Pharmacia Ltd through the acquisition by Pfizer.
He moved to Whatman plc, a FTSE 250 company, where he led the financing of a €50m company acquisition,
oversaw a substantial share price recovery and was a key player in the Whatman turnaround.
Phil joined Europa in 2008 and has used his engineering background in his role as adviser to the Board on HSE
matters. He has been extensively involved in farmin / farmout negotiations, asset disposals and improving the
21
Europa Oil & Gas (Holdings) plc
Group’s financial reporting and forecasting and regularly attends meetings of the UK Onshore Operating Group
(UKOOG).
CW Ahlefeldt-Laurvig, Non-Executive Director
William helped take Europa onto AIM and remains its largest shareholder. He started his career at Maersk as a
petroleum engineer in 1982, followed, in 1987, by IPEC, a London based consultancy, where he was responsible
for field reserves estimations.
In 1990, he became an independent consultant, undertaking field and portfolio evaluations for acquisitions and
field development work on a range of projects in the North Sea, former Soviet Union and Middle East. He was
also, in 1991, a founder and Non-Executive Director of IFX Infoforex Ltd which was successfully sold in 2000.
William has continued to work as an independent consultant petroleum engineer, latest in 2013 – 2016 for a
client in Norway.
Committees: A R N S
SA Williams, Non-Executive Director
Since October 2017, Mr Williams has held the position of Co-CEO of Reabold Resources, an AIM traded,
upstream oil & gas company focused on investing in late stage upstream opportunities. At Reabold, Mr Williams
has played a leading role in raising capital, building a diversified portfolio of investments in the UK, Romania
and the US and, since August 2018, the company's participation in nine wells, eight of which have resulted in
discoveries. Prior to Reabold, Mr Williams held various positions within both the energy and financial sectors
including as a fund manager at Guinness Asset Management and, between 2010 and 2016, as an investment
analyst at M&G focused on energy and resources. Between 2005 and 2010, Mr Williams worked as an energy
investment analyst for Simmons & Company International and from 2003 to 2005 as an analyst at ExxonMobil.
Committees: A R N (chair of the Audit Committee)
22
Europa Oil & Gas (Holdings) plc
Directors’ report
Business review
A detailed review of the Group’s business is set out in the Chairman’s statement (page 4) and Our strategy (page
7).
Future developments
Details of expected future developments for the Group are set out in the Chairman’s statement (page 4) and
Our strategy (page 7).
Dividends
The Directors do not recommend the payment of a dividend (2019: £nil).
Directors and their interests
The Directors’ interests in the share capital of the Company at 31 July were:
CW Ahlefeldt-Laurvig 1
P Greenhalgh
BJ O’Cathain
SG Oddie
SA Williams
Number of ordinary
shares
2020
33,752,442
605,973
250,000
500,000
141,131
2019
33,752,442
605,973
250,000
500,000
-
Number of ordinary
share options
2020
-
3,900,000
1,200,000
1,200,000
1,200,000
2019
-
4,525,000
1,200,000
1,200,000
-
1. CW Ahlefeldt-Laurvig holds his shares with HSBC Global Custody Nominee (UK) Limited.
Details of the vesting conditions of the Directors’ stock options are included in note 23.
Directors’ interests in transactions
No Director had, during the year or at the end of the year, other than disclosed above, a material interest in any
contract in relation to the Group’s activities except in respect of service agreements.
Subject to the conditions set out in the Companies Act 2006, the Company has arranged appropriate Directors’
and Officers’ insurance to indemnify the Directors against liability in respect of proceedings brought by third
parties. Such provisions remain in force at the date of this report.
Financial instruments
See note 1 and note 24 to the financial statements.
Related party transactions
See note 27 to the financial statements.
Post reporting date events
See note 28 to the financial statements.
Capital structure and going concern
Further details on the Group’s capital structure are included in note 22. Comments on going concern are
included in the Operations report and note 1. The critical assumption in the going concern determination is that
Wressle production commences at the forecasted rate in 2020. In the absence of incremental production from
Wressle in 2020 then additional funding by the issuance of shares or sale of assets would be required. If additional
funding was not available there is a risk that commitments could not be fulfilled, and assets would be
relinquished.
Accounting policies
A full list of accounting policies is set out in note 1 to the financial statements. IFRS 16 has come into effect in
the period. It has resulted in the recognition of right of use assets in the balance sheet (detailed in notes 12 and
19).
23
Europa Oil & Gas (Holdings) plc
Disclosure of information to the auditor
In the case of each person who was a Director at the time this report was approved:
▪
▪
So far as that Director was aware there was no relevant available information of which the Company’s
auditor was unaware; and
That Director had taken all necessary steps to make themselves aware of any relevant audit information,
and to establish that the Company’s auditors was aware of that information.
Auditor
A resolution to re-appoint the auditor, BDO LLP, will be proposed at the next Annual General Meeting.
On behalf of the Board
Phil Greenhalgh
Finance Director
24
Europa Oil & Gas (Holdings) plc
Statement of Directors’ responsibilities
Directors’ responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have elected to prepare the Group and Company financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union. Under Company law the Directors
must not approve the financial statements unless they are satisfied that they give a true and fair view of the state
of affairs of the Group and Company and of the profit or loss of the Group for that year. The Directors are
also required to prepare financial statements in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether they have been prepared in accordance with IFRSs as adopted by the European Union,
subject to any material departures disclosed and explained in the financial statements; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on
a website. Financial statements are published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility
of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements
contained therein.
25
Europa Oil & Gas (Holdings) plc
Report of the independent auditor
Independent auditor’s report to the members of Europa Oil & Gas (Holdings) plc
Opinion
We have audited the financial statements of Europa Oil & Gas (Holdings) Plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 31 July 2020 which comprise the consolidated statement of
comprehensive income, the consolidated and Company statements of financial position, the consolidated and
the Company statements of changes in equity, the consolidated and Company statements of cash flows and
notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and,
as regards the Parent Company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 July 2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union ;
the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are independent of the Group and the Parent
Company in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1 to the financial statements concerning the Group and Parent Company’s ability to
continue as a going concern which indicates that the Group and Parent Company is reliant on commencement
of production from Wressle at the forecasted production rate in late 2020. In the absence of this, additional
fundraising would be required to enable the Group and Parent Company to continue as a going concern. This
funding may not be available.
As stated in note 1 these conditions along with other matters set out in the note indicate that a material
uncertainty exists that may cast significant doubt on the Group and Parent Company’s ability to continue as a
going concern.
Our opinion is not modified in respect of this matter.
The calculations supporting the going concern assessment require the Directors to make highly subjective
judgements. We have therefore spent significant audit effort in assessing the appropriateness of the assumptions
involved, and as such this has been identified as a Key Audit Matter.
We performed the following procedures as part of audit;
We obtained Director’s cash flow forecasts for the period to December 2021. We assessed the key underlying
assumptions, including oil prices, reserves, production and expenditure. In doing so, we considered factors such
as actual performance against budget and external market data.
26
Europa Oil & Gas (Holdings) plc
We have considered whether previous forecasts were consistent with actuals, to ascertain whether Management
had a history of accurate forecasting which is not subject to bias.
We reviewed board minutes and RNS announcements for any indicators regarding operating costs and
production that may have an impact on the Group’s ability to continue as a going concern.
We reviewed Director’s sensitivity analysis performed in respect of key assumptions underpinning the forecasts
and we performed our own sensitivity analysis in respect of key assumptions including reducing the oil price,
removing the cash inflows from Wressle and limiting capital expenditure to committed levels.
We assessed the appropriateness of the disclosures included in the financial statements given in note 1.
Key audit matters
In addition to the matter described in the material uncertainty related to going concern section, key audit matters
are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How we addressed the matter in
our audit
KEY OBSERVATIONS
Carrying value of producing assets
of
assessment
As detailed in notes 1 and 12,
the
any
impairment to the carrying value
of the three producing fields
requires significant estimation
by management. The key
estimates
judgements
and
reserves,
include oil price,
decline rate, and discount rate.
An impairment was recognised
in the year on West Firsby. The
rest of the producing projects
were not impaired. Judgement is
required as to whether there
further
should
or
impairment
recognised
whether an assessment
that
there has been an increase in
value should give rise to any
impairment reversals.
any
be
Our work has identified no
of
material
inappropriate
impairment
conclusions.
instances
reviewed
challenged
assumptions
We
management’s
discounted cash flow forecasts for
each of the three producing fields and
the
critically
appropriateness of the key estimates
and
by
management in the discounted cash
included a
flow models which
comparison of oil price forecasts to
market outlook reports, recalculation
of discount rates and comparing cost
to
and production assumptions
historical data in the year.
used
in
We reviewed the reserves and decline
the models and
rates used
compared them to the most recent
independent
competent persons
reports and assessed the objectivity,
competence and independence of
those experts as well as the suitability
of the work of those experts for our
purposes
We reviewed the licences to check
whether or not they remain valid.
the
recalculated
We
impairment
amount on West Firsby in respect of
the completeness and accuracy of
amount recognised.
challenged management’s
We
and
assessments
sensitivity
performed our own
sensitivity
calculations in respect of oil prices,
decline rates and discount rate, along
with considering the appropriateness
27
Europa Oil & Gas (Holdings) plc
of the related disclosures given in
notes 1 and 12 and management’s
assessment not to reverse prior
period impairments.
Carrying value of exploration assets
the Group
The non-producing exploration
assets of
are
classified as intangible assets
within non-current assets in the
statement of financial position.
As detailed in notes 1 and 11,
there are inherent uncertainties
around the recoverability of
exploration
evaluation
and
assets. Some Irish licenses were
impaired during the year and
this
the use of
management judgement.
involved
In
addition, management
assessed that the Wressle project
was under the scope of IFRS 6
as the Group had not yet
obtained approval of the Field
Development Plan at year end.
This
requires
judgement.
assessment
Our work has identified no
of
material
inappropriate
impairment
conclusions.
instances
reviewed and challenged
. We
management’s
impairment
assessment which was carried out in
accordance with IFRS 6 in order to
determine whether management’s
there were no
assessment
indicators
impairment was
appropriate.
that
of
We reviewed management’s decision
to relinquish some of the Irish
licences based on a change in strategy
to focus on gas prospects in the
region and confirmed this results in
impairment of these assets.
We confirmed there is an ongoing
plan to develop the licence areas and
verified that the licences remain valid
for assets
that have not been
impaired.
Our specific audit testing in this
regard included:
• The verification of licence status,
in order to confirm legal title.
• Reviewing exploration activity to
assess whether there was any
evidence from exploration results
to date which would indicate a
potential impairment.
• Obtaining approved budgets and
minutes of Board meetings to
confirm whether or not the Group
intended to continue to explore
specific licences either through a
potential transaction such as a farm
out, or
exploration
through
undertaken by the Group.
challenged management’s
We
assessment,
inquiry and
through
review of board minutes, of whether
or not the Wressle project is still
under evaluation and within the
scope of IFRS 6 as at year end.
We assessed the appropriateness of
the disclosures
the
financial statements given in notes 1
and 11.
included
in
28
Europa Oil & Gas (Holdings) plc
Our application of materiality
Group materiality
Parent company
materiality
Basis for materiality
£100,000 (2019:
£182,000)
£40,000 (2019:
£51,000)
Materiality has been based on 1.5% of total assets. We
consider total assets to be the most appropriate basis for
materiality given the Group is focused on exploration and
development.
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Performance materiality is the application of materiality at the individual account or balance level set at an
amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole. Performance materiality was set at
£75, 000 (2019: £136,500) for the Group and at £30,000 (2019: £38,250) for the Parent Company which
represents 75% (2019: 75%) of the above materiality levels based on the low level of misstatement in the past.
Whilst materiality for the financial statements as a whole was £100,000, each significant component of the Group
was audited to a lower level of materiality ranging from £11,000 to £90,000. We agreed with the Audit
Committee that we would report to the Committee all individual audit differences identified during the course
of our audit in excess of £2,000 (2019: £3,880). We also agreed to report differences below these thresholds
that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
Our Group audit scope focused on the Group’s principal five operating subsidiaries, Europa Oil & Gas Limited,
Europa Oil & Gas (Ireland West) Limited, Europa Oil & Gas (Ireland East) Limited, Europa Oil and Gas New
Ventures Limited and Europa Oil & Gas (Inishkea) Limited, all being located in the UK, which were all subject
to full scope audits. Together with the Parent Company which was also subject to a full scope audit, these
represent the significant components of the Group. All of the Principal components were audited by BDO UK
LLP and 100% of the Group’s revenue, 98% of total assets and 91% of loss before tax were subject to audit.
Three components of the Group were considered non-significant based on their relative size and risk. These
components were principally subject to analytical review procedures to confirm there are no significant risks of
material misstatements within these components.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
29
Europa Oil & Gas (Holdings) plc
•
•
the information given in the strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities set out on page 28, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent
Company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Jack Draycott (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
30
Europa Oil & Gas (Holdings) plc
BDO LLP is a limited liability partnership registered in England and Wales (with registered
number OC305127).
31
Europa Oil & Gas (Holdings) plc
Consolidated statement of comprehensive income
For the year ended 31 July
Revenue
Cost of sales
Impairment of producing fields
Total cost of sales
Gross (loss)/profit
Exploration (write-off)/ write back
Administrative expenses
Finance income
Finance expense
Loss before taxation
Taxation charge
Loss for the year
Other comprehensive income
Items which will not be reclassified to profit /(loss)
Loss on investment revaluation
Total other comprehensive loss
Total comprehensive loss for the year attributable to the
equity shareholders of the parent
Note
2020
£000
2019
£000
2
2
12
11
6
7
3
8
9
1,244
(1,438)
(160)
(1,598)
----------------------------------
(354)
(4,004)
(823)
7
(266)
------------------------------------
(5,440)
-
------------------------------------
(5,440)
=====================================
(197)
------------------------------------
(197)
=====================================
(5,637)
=====================================
1,713
(1,682)
-
(1,682)
----------------------------------
31
270
(811)
43
(187)
------------------------------------
(654)
-
------------------------------------
(654)
=====================================
(59)
------------------------------------
(59)
=====================================
(713)
===================================
Earnings per share (EPS) attributable to the equity
shareholders of the parent
Note
Pence
per share
Pence per
share
Basic and diluted EPS
10
(1.22)p
(0.17)p
The accompanying notes form part of these financial statements.
32
Europa Oil & Gas (Holdings) plc
Consolidated statement of financial position
As at 31 July
Note
2020
£000
2019
£000
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Investments
Inventories
Trade and other receivables
Restricted cash
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Loans
Trade and other payables
Total current liabilities
Non-current liabilities
Loans
Trade and other payables
Long-term provisions
Total non-current liabilities
Total liabilities
Net assets
Capital and reserves attributable to equity holders
of the parent
Share capital
Share premium
Merger reserve
Retained deficit
Total equity
11
12
13
14
15
16
18
17
18
17
21
22
22
22
4,965
476
----------------------------------
5,441
----------------------------------
44
12
234
245
768
----------------------------------
1,303
----------------------------------
6,744
==================================
(2)
(1,013)
------------------------------------
(1,015)
------------------------------------
(48)
(31)
(3,163)
----------------------------------
(3,242)
----------------------------------
(4,257)
-----------------------------------
2,487
==================================
4,447
21,010
2,868
(25,838)
----------------------------------
2,487
==================================
7,818
575
----------------------------------
8,393
----------------------------------
241
19
315
251
2,905
----------------------------------
3,731
----------------------------------
12,124
==================================
-
(1,086)
------------------------------------
(1,086)
------------------------------------
-
-
(2,917)
----------------------------------
(2,917)
----------------------------------
(4,003)
-----------------------------------
8,121
==================================
4,447
21,010
2,868
(20,204)
----------------------------------
8,121
=====================================
These financial statements were approved by the Board of Directors and authorised for issue on 12 October
2020 and signed on its behalf by:
P Greenhalgh, Finance Director
Company registration number 5217946
The accompanying notes form part of these financial statements.
33
Europa Oil & Gas (Holdings) plc
Consolidated statement of changes in equity
Attributable to the equity holders of the parent
Balance at 1 August 2018
Comprehensive loss for the
year
Loss for the year attributable to
the equity shareholders of the
parent
Other comprehensive loss
attributable to the equity
shareholders of the parent
Total comprehensive loss for
the year
Contributions by and
distributions to owners
Issue of share capital
Issue of share options(note 22)
Share-based payments (note 23)
Total contributions by and
distributions to owners
Balance at 31 July 2019
Balance at 1 August 2019
Comprehensive loss for the
year
Loss for the year attributable to
the equity shareholders of the
parent
Other comprehensive loss
attributable to the equity
shareholders of the parent
Total comprehensive loss for
the year
Contributions by and
distributions to owners
Share-based payments (note 23)
Total contributions by and
distributions to owners
Balance at 31 July 2020
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Retained
deficit
£000
Total
equity
£000
3,014
18,481
2,868
(19,508)
4,855
-
-
-
-
(654)
(654)
----------------------------------
----------------------------------
-
-
---------------------------------
(59)
(59)
------------------------------
-------------------------------
-
----------------------------------
-
----------------------------------
-
---------------------------------
(713)
------------------------------
(713)
-------------------------------
1,433
-
-
----------------------------------
1,433
----------------------------------
4,447
==================================
Share
capital
£000
4,447
2,546
(17)
-
----------------------------------
2,529
----------------------------------
21,010
==================================
-
-
-
----------------------------------
-
---------------------------------
2,868
==================================
-
17
-
---------------------------------
17
------------------------------
(20,204)
===============================
Share
premium
£000
Merger
reserve
£000
Retained
deficit
£000
21,010
2,868
(20,204)
3,979
-
-
------------------------------
3,979
-------------------------------
8,121
==============================
Total
equity
£000
8,121
-
-
-
----------------------------------
-
----------------------------------
-
----------------------------------
-
----------------------------------
4,447
==================================
-
----------------------------------
-
----------------------------------
-
----------------------------------
-
----------------------------------
21,010
==================================
-
-
---------------------------------
-
---------------------------------
-
----------------------------------
-
---------------------------------
2,868
==================================
(5,440)
(5,440)
(197)
(197)
------------------------------
(5,637)
------------------------------
3
---------------------------------
3
------------------------------
(25,838)
===============================
-------------------------------
(5,637)
-------------------------------
3
------------------------------
3
-------------------------------
2,487
==============================
The accompanying notes form part of these financial statements.
34
Europa Oil & Gas (Holdings) plc
Company statement of financial position
As at 31 July
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Amounts due from Group companies
Total non-current assets
Current assets
Other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Loans
Trade and other payables
Total current liabilities
Loans
Trade and other payables
Total non-current liabilities
Total liabilities
Net assets
Note
11
12
13
24
15
18
17
18
17
Capital and reserves attributable to equity holders of the
parent
Share capital
Share premium
Merger reserve
Retained deficit
22
22
22
Total equity
2020
£000
2019
£000
-
55
2,341
430
------------------------------------
2,826
------------------------------------
53
288
--------------------------------------
341
---------------------------------------
3,167
========================================
(2)
(515)
------------------------------------
(517)
------------------------------------
(48)
(17)
------------------------------------
(65)
----------------------------------
(582)
------------------------------------
2,585
====================================
302
1
2,341
1,038
------------------------------------
3,682
------------------------------------
79
2,553
--------------------------------------
2,632
---------------------------------------
6,314
====================================
-
(660)
------------------------------------
(660)
------------------------------------
-
-
------------------------------------
-
----------------------------------
(660)
------------------------------------
5,654
====================================
4,447
21,010
2,868
(25,740)
--------------------------------------
2,585
=======================================
4,447
21,010
2,868
(22,671)
--------------------------------------
5,654
======================================
The Company has taken advantage of the exemption provided under Section 408 of the Companies Act 2006
not to publish its individual statement of comprehensive income and related notes. The loss dealt with in the
financial statements of the parent Company is £3,072,000 (2019: loss of £1,772,000).
These financial statements were approved by the Board of Directors and authorised for issue on 12 October
2020 and signed on its behalf by:
P Greenhalgh
Finance Director
Company registration number 5217946
The accompanying notes form part of these financial statements.
35
Europa Oil & Gas (Holdings) plc
Company statement of changes in equity
Balance at 1 August 2018
originally stated
Change in accounting policy
IFRS 9
Share
capital
£000
3,014
Share
premium
£000
Merger
reserve
£000
Retained
deficit
£000
18,481
2,868
(19,483)
Total
equity
£000
4,880
-
-
-
(1,433)
(1,433)
Balance at 1 August restated
----------------------------------
3,014
----------------------------------
18,481
---------------------------------
2,868
------------------------------
(20,916)
-------------------------------
3,447
Comprehensive loss for the
year
Loss for the year attributable to
the equity shareholders of the
parent
Total comprehensive loss for
the year
Contributions by and
distributions to owners
Issue of share capital
Issue of share options (note 22)
Share-based payments (note 23)
Total contributions by and
distributions to owners
Balance at 31 July 2019
Balance at 1 August 2019
originally stated
Comprehensive loss for the
year
Loss for the year attributable to
the equity shareholders of the
parent
Total comprehensive loss for
the year
Contributions by and
distributions to owners
Share-based payments (note 23)
Total contributions by and
distributions to owners
Balance at 31 July 2020
-
-
-
(1,772)
(1,772)
----------------------------------
----------------------------------
---------------------------------
-
-
-
------------------------------
(1,772)
-------------------------------
(1,772)
1,433
-
-
----------------------------------
1,433
----------------------------------
4,447
==================================
2,546
(17)
-
----------------------------------
2,529
----------------------------------
21,010
==================================
-
-
-
----------------------------------
-
17
-
---------------------------------
-
17
---------------------------------
2,868
==================================
------------------------------
(22,671)
===============================
Share
capital
£000
4,447
Share
premium
£000
21,010
Merger
reserve
£000
2,868
Retained
deficit
£000
(22,671)
3,979
-
-
------------------------------
3,979
-------------------------------
5,654
==============================
Total
equity
£000
5,654
-
----------------------------------
-
-
----------------------------------
-
-
---------------------------------
-
(3,072)
(3,072)
------------------------------
(3,072)
-------------------------------
(3,072)
-
----------------------------------
-
----------------------------------
4,447
==================================
-
----------------------------------
-
----------------------------------
21,010
==================================
-
----------------------------------
3
---------------------------------
-
---------------------------------
2,868
==================================
3
------------------------------
(25,740)
===============================
3
------------------------------
3
-------------------------------
2,585
==============================
36
Europa Oil & Gas (Holdings) plc
The accompanying notes form part of these financial statements
Consolidated statement of cash flows
For the year ended 31 July
Note
23
12
12
11
6
7
22
Cash flows used in operating activities
Loss after tax from continuing operations
Adjustments for:
Share-based payments
Depreciation
Impairment of producing field
Exploration write off/ (write back)
Finance income
Finance expense
Decrease in trade and other receivables
Decrease in inventories
(Decrease)/increase in trade and other payables
Net cash used in operations
Income taxes paid
Net cash used in operating activities
Cash flows used in investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Cash guarantee re Morocco
Sale of part interest in licence – associated costs
Interest received
Net cash used in investing activities
Cash flows (used in)/ from financing activities
Gross proceeds from issue of share capital
Costs incurred on issue of share capital
Proceeds from borrowings
Lease liability payments
Lease liability interest payments
Finance costs
Net cash (used in)/from financing activities
Net (decrease)/ increase in cash and cash equivalents
Exchange (loss)/gain on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2020
£000
(5,440)
3
186
160
4,004
(7)
266
72
7
(95)
------------------------------------
(844)
-
------------------------------------
(844)
=====================================
(100)
(1,148)
(1)
(12)
7
-----------------------------------
(1,254)
=====================================
-
-
50
(73)
(3)
(1)
-----------------------------------
(27)
=====================================
(2,125)
(12)
2,905
-----------------------------------
768
=====================================
2019
£000
(654)
-
94
-
(270)
(43)
187
7
1
17
------------------------------------
(661)
-
------------------------------------
(661)
=====================================
(1)
(1,973)
(251)
(8)
16
-----------------------------------
(2,217)
=====================================
4,299
(320)
-
-
(5)
-----------------------------------
3,974
=====================================
1,096
38
1,771
-----------------------------------
2,905
=====================================
The accompanying notes form part of these financial statements.
37
Europa Oil & Gas (Holdings) plc
Company statement of cash flows
For the year ended 31 July
Cash flows used in operating activities
Loss after tax from continuing operations
Adjustments for:
Share-based payments
Depreciation
Exploration write off
Movement in intercompany loan provision
Finance income
Finance expense
Decrease in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flows used in investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Movement on loans to Group companies
Interest received
Net cash used in investing activities
Cash flows (used in)/from financing activities
Gross proceeds from issue of share capital
Costs incurred on issue of share capital
Proceeds from borrowings
Lease liability principal payment
Lease liability interest payment
Finance costs
Net cash (used in)/from financing activities
Net (decrease)/ increase in cash and cash equivalents
Exchange gain on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
23
12
11
24
22
22
2020
£000
2019
£000
(3,072)
(1,772)
3
66
371
3,075
(680)
3
17
11
-----------------------------------
(206)
=====================================
(3)
(69)
(1,981)
2
-----------------------------------
(2,051)
=====================================
-
-
50
(75)
(63)
(3)
-
-----------------------------------
(16)
=====================================
(2,273)
8
2,553
-----------------------------------
288
=====================================
-
1
-
2,164
(638)
2
4
33
-----------------------------------
(206)
=====================================
(1)
(200)
(1,845)
8
-----------------------------------
(2,038)
=====================================
4,299
(320)
-
(2)
-----------------------------------
3,977
=====================================
1,733
14
806
-----------------------------------
2,553
=====================================
The accompanying notes form part of these financial statements.
38
Europa Oil & Gas (Holdings) plc
1
Notes to the financial statements
Accounting Policies
General information
Europa Oil & Gas (Holdings) plc is a Company incorporated and domiciled in England and Wales with
registered number 5217946. The address of the registered office is 6 Porter Street, London, W1U 6DD. The
Company’s administrative office is at the same address.
The functional and presentational currency of the Company is Sterling (UK£).
Basis of accounting
The consolidated and individual Company financial statements have been prepared in accordance with
applicable International Financial Reporting Standards (IFRS) as adopted by the EU. The policies have not
changed from the previous year.
Exploration and evaluation assets are measured at historical cost and tested at least twice annually for
impairment. Internally generated intangibles are measured at historic cost.
The accounting policies that have been applied in the opening statement of financial position have also been
applied throughout all periods presented in these financial statements. These accounting policies comply with
each IFRS that is mandatory for accounting periods ending on 31 July 2020.
Going concern
The Directors have prepared a cash flow forecast for the period ending 31 December 2021, which considers the
continuing and forecast cash inflow from the Group’s producing assets, the cash held by the Group at the year
end, less administrative expenses and planned capital expenditure. The Directors have concluded, at the time of
approving the financial statements, that there is a reasonable expectation, based on the Group’s cash flow
forecasts, that the forecasts are achievable and accordingly the Group will be able to continue as a going concern
and meet its obligations as and when they fall due. The critical assumption in reaching that conclusion are that
Wressle production commences at the forecasted rate in 2020, oil prices do not fall for a sustained period, and
Covid-19 does not cause our production to be suspended. In the absence of incremental production from
Wressle in 2020, oil prices falling for sustained periods, or loss of production then additional funding by the
issuance of shares or sale of assets would be required. If additional funding was not available there is a risk that
commitments could not be fulfilled, and assets would be relinquished.
These conditions indicate a material uncertainty which may cast significant doubt as to the Group and Parent
Company’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge
its liabilities in the normal course of business. These financial statements do not include the adjustments that
would result if the Group and Parent Company are unable to continue as a going concern.
Accounting standards adopted in the period
The Group adopted IFRS16 Leases with effect form 1 August 2019. IFRS 16 was issued in January 2016 to
replace IAS17 Leases.
IFRS 16 sets out the principles for the recognition, measurement., presentation and disclosure of leases and
requires lessees to account for all leases, with limited exceptions, under a single on-balance sheet model similar
to accounting for finance leases under IAS 17. Under IFRS 16, at the commencement date of a lease, a lessee
is required to recognise a liability to make lease payments (“lease liability”) and an asset representing the right
to use the underlying asset during the lease term (“right of use asset”). Lease liabilities are measured at the
present value of future lease payments over the reasonably certain lease term. Variable lease payments that do
not depend on an index or a rate are not included in the lease liability. Such payments are expensed as
incurred throughout the lease term.
In applying IFRS 16 for the first time, the Group has adopted the modified retrospective approach to
adoption on 1 August 2019, measuring right of use assets at an amount based on their respective lease liability
on adoption, with the cumulative effect of adopting the standard recognised at the date of initial application
without restatement of comparative information.
Lessees are required to separately recognise the interest expense associated with the unwinding of the lease
liability and the depreciation expense on the right of use asset. These costs replace amounts previously
recognised as operating expenditure in respect of operating leases in accordance with IAS 17.
39
Europa Oil & Gas (Holdings) plc
Accounting standards to be adopted in future periods
Basis of consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an
investee if all three of the following elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of
control. Intra Group balances are eliminated on consolidation. Unrealised gains on transactions between the
Group and its subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
The Group is engaged in oil and gas exploration, development and production through unincorporated joint
operations.
Joint arrangements
Joint arrangements are those arrangements in which the Group holds an interest on a long-term basis which are
jointly controlled by the Group and one or more venturers under a contractual arrangement. When these
arrangements do not constitute entities in their own right, the consolidated financial statements reflect the
relevant proportion of costs, revenues, assets and liabilities applicable to the Group’s interests in accordance
with IFRS 11. The Group’s exploration, development and production activities are presently conducted jointly
with other companies in this way.
For the licences where the Group does not hold 100% equity (refer to the licence interests table on page 6) a
joint arrangement exists. The equity and voting interest of the Group is disclosed in the table, activities are typical
for activities in the oil and gas sector and are strategic to the Group’s activities. The principal place of business
for all the joint arrangements is the UK.
Revenue recognition
The Group has adopted IFRS 15 from 1 August 2018. The standard provides a single comprehensive model for
revenue recognition. The Group has elected to apply the modified retrospective method. The core principle of
the standard is that an entity shall recognise revenue when control passes on the transfer of promised goods or
services to customers at an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. The standard introduced a new contract-based revenue recognition model
with a measurement approach that is based on an allocation of the transaction price. This is described further in
the accounting policies below. Contracts with customers are
presented in an entity's balance sheet as a contract liability, a contract asset, or a receivable, depending on the
relationship between the entity’s performance and the customer’s payment. The Group's accounting policy
under IFRS 15 is that revenue is recognised when the Group satisfies a performance obligation by transferring
oil to a customer. The title to oil and gas typically transfers to a customer at the same time as the customer takes
physical possession of the oil or gas. Typically, at this point in time, the performance obligations of the Group
are fully satisfied. The accounting for revenue under IFRS 15 does not, therefore, represent a substantive change
from the Group's previous accounting.
Revenue is measured based on the consideration to which the Group expects to be entitled under the terms of
a contract with a customer. The consideration is determined by the quantity and price of oil and gas delivered
to the customer at the end of each month.
Non-current assets
Oil and gas interests
The financial statements with regard to oil and gas exploration and appraisal expenditure have been prepared
under the full cost basis. This accords with IFRS 6 which permits the continued application of a previously
adopted accounting policy. The unit of account for exploration and evaluation assets is the individual licence.
Pre-production assets
Pre-production assets are categorised as intangible assets on the statement of financial position. Pre-licence
expenditure is expensed as directed by IFRS 6. Expenditure on licence acquisition costs, geological and
geophysical costs, costs of drilling exploration, appraisal and development wells, and an appropriate share of
overheads (including Directors’ costs) are capitalised and accumulated on a licence by licence basis. These costs
which relate to the exploration, appraisal and development of oil and gas interests are initially held as intangible
non-current assets pending determination of technical feasibility and commercial viability. On commencement
40
Europa Oil & Gas (Holdings) plc
of production these costs are tested for impairment prior to transfer to production assets. If licences are
relinquished, or assets are not deemed technically feasible or commercially viable, accumulated costs are written
off to cost of sales.
Production assets
Production assets are categorised within property, plant and equipment on the statement of financial position.
With the determination of commercial viability and approval of an oil and gas project the related pre-production
assets are transferred from intangible non-current assets to tangible non-current assets and depreciated upon
commencement of production within the appropriate cash generating unit.
Impairment tests
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units) as disclosed in notes 11 and 12. As a result, some assets are tested
individually for impairment and some are tested at cash generating unit level.
Impairment tests are performed when indicators as described in IAS 36 are identified. In addition, indicators
such as a lack of funding or farmout options for a licence which is approaching termination or the implied value
of a farmout transaction are considered as indicators of impairment.
An impairment loss is recognised and charged to cost of sales for the amount by which the asset's or cash
generating unit's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair
value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow
evaluation. All assets are subsequently reassessed for indications that an impairment loss previously recognised
may no longer exist.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes
directly attributable costs and the estimated present value of any future unavoidable costs of dismantling and
removing items. The corresponding liability is recognised within provisions.
Depreciation
All expenditure within tangible non-current assets is depreciated from the commencement of production, on a
unit of production basis, which is the ratio of oil and gas production in the period to the estimated quantities of
proven plus probable commercial reserves at the end of the period, plus the production in the period. Costs
used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated
future field development costs within each licence. Changes in the estimates of commercial reserves or future
field development costs are dealt with prospectively.
Furniture and computers are depreciated on a 25% per annum straight line basis.
Reserves
Proven and probable oil and gas reserves are estimated quantities of commercially producible hydrocarbons
which the existing geological, geophysical and engineering data shows to be recoverable in future years. The
proven reserves included herein conform to the definition approved by the Society of Petroleum Engineers
(SPE) and the World Petroleum Congress (WPC). The probable and possible reserves conform to definitions
of probable and possible approved by the SPE/WPC using the deterministic methodology. Reserves used in
accounting estimates for depreciation are updated periodically to reflect management’s view of reserves in
conjunction with third party formal reports. Reserves are reviewed at the time of formal updates or as a
consequence of operational performance, plans and the business environment at that time.
Reserves are adjusted in the year that formal updates are undertaken or as a consequence of operational
performance and plans, and the business environment at that time, with any resulting changes not applied
retrospectively.
Future decommissioning costs
A provision for decommissioning is recognised in full at the point that the Group has an obligation to
decommission an appraisal, development or producing well. A corresponding non-current asset (included within
producing fields in note 12) of an amount equivalent to the provision is also created. The amount recognised is
the estimated cost of decommissioning, discounted to its net present value and is reassessed each year in
accordance with local conditions and requirements. For producing wells, the asset is subsequently depreciated
as part of the capital costs of production facilities within tangible non-current assets, on a unit of production
basis. Any decommissioning obligation in respect of a pre-production asset is carried forward as part of its cost
and tested annually for impairment in accordance with the above policy.
41
Europa Oil & Gas (Holdings) plc
Changes in the estimates of commercial reserves or decommissioning cost estimates are dealt with prospectively
by recording an adjustment to the provision, and a corresponding adjustment to the decommissioning asset.
The unwinding of the discount on the decommissioning provision is included within finance expense.
Acquisitions of exploration licences
Acquisitions of exploration licences through acquisition of non-operational corporate structures that do not
represent a business, and therefore do not meet the definition of a business combination, are accounted for as
the acquisition of an asset. Related future consideration that is contingent is not recognised as an asset or liability
until the contingent event has occurred.
Taxation
Current tax is the tax payable based on taxable profit / (loss) for the year.
Deferred income taxes are calculated using the balance sheet liability method on temporary differences. Deferred
tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax
bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition
of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided
if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future. Tax losses available to be carried forward as well as other income tax credits to
the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent
that it is probable that the underlying deductible temporary difference will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply
to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the statement of
comprehensive income, except where they relate to items that are charged or credited directly to equity in which
case the related deferred tax is also charged or credited directly to equity.
Foreign currency
The Group and Company prepare their financial statements in Sterling.
Transactions denominated in foreign currencies are translated at the rates of exchange ruling at the date of the
transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at
the reporting date. Non-monetary items that are measured at historical cost in a foreign currency are translated
at the exchange rate at the date of transaction. Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date the fair value was determined.
Any exchange differences arising on the settlement of items or on translating items at rates different from those
at which they were initially recorded are recognised in the Statement of comprehensive income in the period in
which they arise. Exchange differences on non-monetary items are recognised in the Statement of changes in
equity to the extent that they relate to a gain or loss on that non-monetary item taken to the Statement of changes
in equity, otherwise such gains and losses are recognised in the Statement of comprehensive income.
Europa Oil & Gas (Holdings) plc is domiciled in the UK, which is its primary economic environment and the
Company’s functional currency is Sterling. The Group’s current operations are based in the UK and Ireland and
the functional currencies of the Group's entities are the prevailing local currencies in each jurisdiction. Given
that the functional currency of the Company is Sterling, management has elected to continue to present the
consolidated financial statements of the Group and Company in Sterling.
Investments
Investments, which are only investments in subsidiaries, are carried at cost less any impairment. Additions
include the net value of share options issued to employees of subsidiary companies less any lapsed, unvested
options.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
42
Europa Oil & Gas (Holdings) plc
Financial assets
Financial assets are classified as either financial assets at amortised cost, at fair value through other
comprehensive income (‘FVTOCI’) or at fair value through profit or loss (‘FVPL’) depending upon the business
model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial
asset.
A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at
the end of each reporting period. The Group applies a simplified approach to measure the credit loss allowance
for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is
evaluated for each trade receivable taking into account payment history, payments made subsequent to year end
and prior to reporting, past default experience and the impact of any other relevant and current observable data.
The group applies a general approach on all other receivables classified as financial assets. The general approach
recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial
recognition.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
party. The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or
have expired.
Fair value through other comprehensive income
The Group has a number of strategic investments in listed and unlisted entities which are not accounted for as
subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable
election to classify the investments at fair value through other comprehensive income rather than through profit
or loss as the Group considers this measurement to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and
accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within
fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not
reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost
of the investment, in which case the full or partial amount of the dividend is recorded against the associated
investment’s carrying amount.
Purchases and sales of financial assets measured at fair value through other comprehensive income are
recognised on settlement date with any change in fair value between trade date and settlement date being
recognised in the fair value through other comprehensive income reserve.
Amortised cost
This category is the most relevant to the Company. Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market. The losses arising from impairment
are recognised in a separate line in the income statement.
This category generally applies to trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and include all highly liquid investments with a maturity of three
months or less.
Restricted cash are those amounts held by third parties on behalf of the Group and are not available for the
Group’s use; these are accounted for separately from cash and cash equivalents.
Financial Liabilities
The classification of financial liabilities at initial recognition depends on the purpose for which the financial
liability was issued and its characteristics. All purchases of financial liabilities are recorded on trade date, being
the date on which the Group becomes party to the contractual requirements of the financial liability. Unless
otherwise indicated the carrying amounts of the Group’s financial liabilities approximate to their fair values. The
Group’s financial liabilities consist of financial liabilities measured at amortised cost and financial liabilities at
fair value through profit or loss.
Trade and other payables
Trade and other payables are initially recorded at fair value and subsequently carried at amortised cost.
43
Europa Oil & Gas (Holdings) plc
Derecognition of financial liabilities
A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual
obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the statement of
comprehensive income.
Treatment of finance costs
All finance costs are expensed through the income statement. The Group does not incur any finance costs that
qualify for capitalisation.
Defined contribution pension schemes
The pension costs charged against profits are the contributions payable to the scheme in respect of the
accounting period.
Inventories
Inventories comprise oil in tanks stated at the lower of cost and net realisable value. Cost is determined by
reference to the actual cost of production in the period.
Share-based payments
All goods and services received in exchange for the grant of any share-based payment are measured at their fair
values. Where employees are rewarded using share-based payments, the fair values of employees' services are
determined indirectly by reference to the fair value of the instrument granted to the employee. This fair value is
appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability
and sales growth targets).
All equity-settled share-based payments are ultimately recognised as an expense in the statement of
comprehensive income with a corresponding credit to reserves. Where options over the parent Company’s
shares are granted to employees of subsidiaries of the parent, the charge is recognised in the statement of
comprehensive income of the subsidiary. In the parent Company accounts there is an increase in the cost of the
investment in the subsidiary receiving the benefit.
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Estimates are subsequently
revised if there is any indication that the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is
made to any expense recognised in prior periods if the number of share options ultimately exercised is different
to that initially estimated.
Upon exercise of share options, the proceeds received, net of attributable transaction costs, are credited to share
capital, and where appropriate share premium.
Critical accounting judgements and key sources of estimation uncertainty
Details of the Group’s significant accounting judgements and critical accounting estimates are set out in these
financial statements and include:
• Going concern - the critical assumptions are that Wressle production commences at the forecasted rate
in 2020, oil prices do not fall to the lows seen in 2020 and Covid-19 does not force the suspension of
production. See note 1 Going concern disclosures for further information.
• Carrying value of intangible assets (note 11) – carrying values are justified with reference to indicators
of impairment as set out in IFRS 6. Based on judgements at 31 July 2020, the carrying value of the 5
oil-prone licences in Ireland were written off (2019: no impairment). (Please see pages 8 and 9
respectively for the conclusions reached as to why no impairment was recognised regarding the renewal
date of the FEL 3/13 licence, government announcements of the future of Irish offshore oil exploration
and PEDL180 & 182 (Wressle)).
• Carrying value of property, plant and equipment (note 12) – carrying values are justified by reference to
future estimates of cash flows, discounted at appropriate rates.
• Deferred taxation (note 20) – assumptions regarding the future profitability of the Group and whether
the deferred tax assets will be recovered.
• Decommissioning provision (note 21) – inflation and discount rate estimates (3% and 10% respectively)
are used in calculating the provision, along with third party estimates of remediation costs.
44
Europa Oil & Gas (Holdings) plc
2
Operating segment analysis
In the opinion of the Directors the Group has four reportable segments as reported to the Chief Executive
Officer, being the UK, Ireland, Morocco and new ventures.
The reporting on these segments to management focuses on revenue, operating costs and capital expenditure.
The impact of such criteria is discussed further in the Chairman’s statement and strategic report of this annual
report.
Income statement for the year ended 31 July 2020
UK
Ireland
Morocco
Revenue
Cost of sales
Impairment of producing fields
Cost of sales
Gross profit
Exploration write-off
Administrative expenses
Finance income
Finance costs
Loss before tax
Taxation
Loss for the year
£000
1,244
(1,438)
(160)
(1,598)
---------------------------------
(354)
-
(750)
7
(266)
-----------------------------------
(1,363)
-
-----------------------------------
(1,363)
£000
-
-
-
-
---------------------------------
-
£’000
-
-
-
-
---------------------------------
-
New
ventures
£000
-
-
-
-
---------------------------------
-
(4,004)
-
-
(8)
-
-
---------------------------------
(4,012)
-
---------------------------------
(4,012)
(49)
-
-
---------------------------------
(49)
-
---------------------------------
(49)
(16)
-
-
---------------------------------
(16)
-
---------------------------------
(16)
Total
£000
1,244
(1,438)
(160)
(1,598)
---------------------------------
(354)
(4,004)
(823)
7
(266)
-----------------------------------
(5,440)
-
-----------------------------------
(5,440)
Segmental assets and liabilities as at 31 July 2020
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Other segment items
Capital expenditure
Depreciation
Share-based payments
UK
Ireland
Morocco
£000
3,660
1,058
-----------------------------------
4,718
-----------------------------------
(3,242)
(259)
-----------------------------------
(3,501)
-----------------------------------
£000
1,482
-
-----------------------------------
1,482
-----------------------------------
-
(733)
-----------------------------------
(733)
-----------------------------------
£000
299
245
-----------------------------------
544
-----------------------------------
-
(23)
-----------------------------------
(23)
-----------------------------------
New
Ventures
£’000
-
-
--------------------------------
--------------------------------
-
-
---------------------------------
-
--------------------------------
139
186
3
734
275
-
-
-
-
-
-
-
Total
£000
5,441
1,303
-----------------------------------
6,744
-----------------------------------
(3,242)
(1,015)
-----------------------------------
(4,257)
-----------------------------------
1,148
186
3
45
Europa Oil & Gas (Holdings) plc
Income statement for the year ended 31 July 2019
Revenue
Cost of sales
Impairment of producing fields
Cost of sales
Gross profit
Exploration write-back
Administration expenses
Finance income
Finance costs
Loss before tax
Taxation
Loss for the year
UK
Ireland
£000
1,713
(1,682)
-
(1,682)
---------------------------------
31
270
(653)
43
(187)
-----------------------------------
(496)
£000
-
-
-
-
---------------------------------
-
-
-
-
-
---------------------------------
-
New
ventures
£000
-
-
-
-
---------------------------------
-
-
(158)
-
-
---------------------------------
(158)
Total
£000
1,713
(1,682)
-
(1,682)
---------------------------------
31
270
(811)
43
(187)
-----------------------------------
(654)
-
-----------------------------------
(496)
-
---------------------------------
-
-
---------------------------------
(158)
-
-----------------------------------
(654)
Segmental assets and liabilities as at 31 July 2019
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Other segment items
Capital expenditure
Depreciation
UK
Ireland
£000
3,661
3,718
-----------------------------------
7,379
-----------------------------------
(2,917)
(373)
-----------------------------------
(3,290)
-----------------------------------
£000
4,732
13
-----------------------------------
4,745
-----------------------------------
-
(709)
-----------------------------------
(709)
-----------------------------------
New
Ventures
£’000
-
-
--------------------------------
-
--------------------------------
-
(4)
---------------------------------
(4)
--------------------------------
Total
£000
8,393
3,731
-----------------------------------
12,124
-----------------------------------
(2,917)
(1,086)
-----------------------------------
(4,003)
-----------------------------------
164
1,809
94
-
-
-
1,973
94
100% of the total revenue (2019: 100%) relates to UK based customers. Of this figure, one single customer
(2019: one) commands more than 99% of the total. UK revenue by site was as follows: West Firsby £394,000
(2019: £617,000); Crosby Warren £355,000 (2019: £489,000); and Whisby £495,000 (2019: £607,000).
46
Europa Oil & Gas (Holdings) plc
3
Loss before taxation
Loss before taxation is stated after charging:
Depreciation and amortisation on property, plant &
equipment
Staff costs including Directors
Diesel
Business rates
Site safety and security
Exploration write-off/(write-back)
Impairment
Fees payable to the auditor for the audit
Operating leases – land and buildings
Amount of inventory recognised as an expense
Foreign exchange loss
12
5
11
12
4
Directors’ emoluments
Directors’ salaries and fees – Company and Group
CW Ahlefeldt-Laurvig
RJHM Corrie (to 12 March 2020)
P Greenhalgh
HGD Mackay (to 21 November 2019)
BJ O’Cathain
SG Oddie (CEO from 21 November 2019, previously Chairman)
S Williams (appointed 12 March 2020)
Directors’ pensions
P Greenhalgh
HGD Mackay (to 21 November 2019)
2020
£000
186
1,025
95
63
72
4,004
160
53
42
7
16
================
2020
£000
23
22
138
183
23
130
10
-----------------------------------
529
===================================
17
5
-----------------------------------
22
====================================
The above charge represents premiums paid to money purchase pension plans during the year.
Directors’ share-based payments
S Williams (appointed 12 March 2020)
2020
£000
3
===================================
2019
£000
94
991
123
60
132
(270)
-
47
96
2
-
===============
2019
£000
25
25
139
185
25
40
-
-----------------------------------
439
===================================
20
19
-----------------------------------
39
====================================
2019
£000
-
===================================
The above represents the accounting charge in respect of share options. No share options were exercised during
the period (2019: none).
Directors’ total emoluments
Salaries and fees
Social security costs
Pensions
Share-based payments
2020
£000
529
64
22
3
---------------------------------------
618
===================================
2019
£000
439
54
39
-
---------------------------------------
532
===================================
47
Europa Oil & Gas (Holdings) plc
5
Employee information
Average monthly number of employees including Directors - Group
Management and technical
Field exploration and production
Staff costs - Group
Wages and salaries (including Directors’ emoluments)
Social security
Pensions
Share-based payments (note 23)
Average monthly number of employees including Directors -
Company
Management and technical
Staff costs - Company
Wages and salaries (including Directors’ emoluments)
Social security
Pensions
Share-based payment (note 23)
6
Finance income
Bank interest received
Other finance income
7
Finance expense
Unwinding of discount on decommissioning provision (note 21)
Other finance expense
8
Taxation
Movement in deferred tax asset (note 20)
Movement in deferred tax liability (note 20)
Tax charge
48
2020
Number
9
4
----------------------------------
13
=================================
2020
£000
864
106
52
3
-----------------------------------
1,025
===============================
2020
Number
9
----------------------------------
9
=================================
2020
£000
680
83
37
3
-----------------------------------
803
===============================
2020
£000
7
-
------------------------------
7
================================
2020
£000
246
20
------------------------------------
266
================================
2019
Number
9
4
----------------------------------
13
================================
2019
£000
821
99
71
-
-----------------------------------
991
===============================
2019
Number
9
----------------------------------
9
==================================
2019
£000
612
72
56
-
-----------------------------------
740
===============================
2019
£000
16
27
------------------------------
43
================================
2019
£000
182
5
------------------------------------
187
================================
2020
£000
(16)
16
------------------------------------
-
================================
2019
£000
(117)
117
------------------------------------
-
=================================
Europa Oil & Gas (Holdings) plc
UK corporation tax is calculated at 30% (2019: 30%) of the estimated assessable profit for the year being the
applicable rate for a ring-fence trade excluding the Supplementary Charge of 10%.
Loss before tax
Tax reconciliation
Loss multiplied by the standard rate of corporation tax in the UK including
Supplementary Charge of 40% (2019: 40%)
Expenses not deductible for tax purposes
Deferred tax asset not recognised
Other reconciling items
Total tax credit
9
Other comprehensive income
Loss on investment revaluation
2020
£000
(5,440)
================================
2019
£000
(654)
================================
(2,176)
1,672
505
(1)
--------------------------------------
-
==================================
(261)
35
76
150
--------------------------------------
-
==================================
2020
£000
(197)
================================
2019
£000
(59)
================================
On 8 May 2019, the Group sold its interest in PEDL143 to UK Oil & Gas Plc (‘UKOG’) for 25,951,557 UKOG
shares. At the time of the sale the shares were worth 1.156p each, resulting in a total value of £300,000. The
investment was revalued at the year end to £44,000 (0.017p per share (2019:£241,000 (0.93p per share)). An
irrevocable election has been made to record gains and losses arising on the shares as Other Comprehensive
Income.
10
Earnings per share
Basic earnings per share (‘EPS’) has been calculated on the loss after taxation divided by the weighted average
number of shares in issue during the period. Diluted EPS uses an average number of shares adjusted to allow
for the issue of shares on the assumed conversion of all in-the-money options.
As the Group made a loss from continuing operations in both the current and prior years, any potentially dilutive
instruments are considered to be anti-dilutive. Therefore, the diluted EPS is equal to the basic EPS. As at 31
July 2020 there were 24,203,458 (2019: 24,238,458) potentially dilutive instruments in issue.
The calculation of the basic and diluted earnings per share is based on the following:
Loss for the year attributable to the equity shareholders of the parent
Weighted average number of shares
For the purposes of basic and diluted EPS
2020
£000
(5,440)
===================================
2019
£000
(654)
===================================
444,691,599
393,259,484
11
Intangible assets
Intangible assets – Group
At 1 August
Additions
Disposal
Exploration write-off
At 31 July
2020
£000
7,818
1,151
-
(4,004)
-----------------------------------
4,965
===================================
2019
£000
5,959
1,869
(10)
-
-----------------------------------
7,818
===================================
49
Europa Oil & Gas (Holdings) plc
Intangible assets comprise the Group’s pre-production expenditure on licence interests as follows:
Ireland FEL 2/13 (Doyle A, B, C, Kilroy, Keane & Kiely)
Ireland FEL 3/13 (Beckett, Wilde, Shaw)
Ireland FEL 1/17
Ireland LO 16/19
Ireland FEL 4/19 (Inishkea)
Ireland LO 16/22
UK PEDL180 (Wressle)
UK PEDL181
UK PEDL182 (Broughton North)
UK PEDL299 (Hardstoft)
UK PEDL343 (Cloughton)
Morocco (Inezgane)
Total
Disposal
UK PEDL143 (Holmwood)
Exploration write-off
Ireland FEL 2/13 (Doyle A, B, C, Kilroy, Keane & Kiely)
Ireland FEL 3/13 (Beckett, Wilde, Shaw)
Ireland FEL 1/17
Ireland LO 16/19
Ireland LO 16/22
Total
2020
£000
-
-
-
-
1,482
-
2,947
118
29
12
78
299
--------------------------------
4,965
================================
-
================================
1,445
1,343
845
94
277
-----------------------------------
4,004
==================================
2019
£000
1,280
1,255
636
89
1,259
213
2,867
101
29
12
77
-
--------------------------------
7,818
================================
10
================================
-
-
-
-
-
-----------------------------------
-
=================================
Exploration write-back
On 8 May 2019 the Group sold its interest in PEDL143 (Holmwood) to UK Oil & Gas Plc (‘UKOG’) for
25,951,557 shares in UKOG at 1.156p per share.
Consideration for the PEDL143 interest
Disposal costs
Book value of remaining interest
Exploration write-back
2020
£000
-
-
-
-----------------------------------
-
===================================
2019
£000
300
(20)
(10)
-----------------------------------
270
===================================
If the Group is not able to or elects not to continue in any other licence, then the impact on the financial
statements will be the impairment of some or all of the intangible assets disclosed above. Further details of
commitments are included in note 25.
Intangible assets - Company
At 1 August
Additions
Transfer to Group companies
Exploration write-off
At 31 July
2020
£000
302
69
-
(371)
----------------------------------------
-
===================================
2019
£000
198
106
(2)
-
----------------------------------------
302
===================================
50
Europa Oil & Gas (Holdings) plc
Intangible assets comprise the Company’s pre-production expenditure on licence interests as follows:
Ireland LO 16/19
Ireland LO 16/22
Total
Exploration write-off
Ireland LO 16/19
Ireland LO 16/22
Total
2020
£000
-
-
-------------------------------------
-
================================
2019
£000
89
213
-------------------------------------
302
================================
2020
£000
94
277
-------------------------------------
371
================================
2019
£000
-
-
-----------------------------
-
================================
LO 16/22 and LO 16/19 were relinquished due to a lack of commercial prospects and the £371,000 spent to
date was written off.
12
Property, plant & equipment
Property, plant & equipment - Group
Cost
At 1 August 2018
Additions
At 31 July 2019
Additions
On transition
Disposals
At 31 July 2020
Depreciation, depletion and impairment
At 1 August 2018
Charge for year
At 31 July 2019
Charge for year
Disposal
Impairment in year
At 31 July 2020
Net Book Value
At 31 July 2018
At 31 July 2019
At 31 July 2020
Furniture &
computers
£000
Producing
fields
£000
Right of use
assets
£000
52
1
-------------------------------
53
3
-
(50)
-------------------------------
6
===============================
51
1
-------------------------------
52
1
(50)
-
-------------------------------
3
===============================
1
===============================
1
===============================
3
===============================
10,790
-
-------------------------------
10,790
97
-
-
-------------------------------
10,887
===============================
10,123
93
-------------------------------
10,216
112
-
160
-------------------------------
10,488
===============================
667
===============================
574
===============================
399
===============================
-
-
-------------------------------
-
-
147
-
-------------------------------
147
===============================
-
-
-------------------------------
-
73
-
-
-------------------------------
73
===============================
-
===============================
-
===============================
74
===============================
Total
£000
10,842
1
-------------------------------
10,843
100
147
(50)
-------------------------------
11,040
===============================
10,174
94
-------------------------------
10,268
186
(50)
160
-------------------------------
10,564
===============================
668
===============================
575
===============================
476
===============================
The producing fields referred to in the table above are the production assets of the Group, namely the oilfields
at Crosby Warren and West Firsby, and the Group’s interest in the Whisby W4 well, representing the Group’s
three cash generating units.
51
Europa Oil & Gas (Holdings) plc
The carrying value of each producing field was tested for impairment by comparing the carrying value with the
value-in-use. The value-in-use was calculated using a discounted cash flow model with production decline rates
of 5-12%, Brent crude prices rising from US$48 per barrel in 2021 to US$61 per barrel in 2023 and a pre-tax
discount rate of 13.4%. The pre-tax discount rate is derived from a post-tax rate of 10% and is high because of
the applicable rates of tax in the UK. Cash flows were projected over the expected life of the fields which is
expected to be longer than five years.
Based on the assumptions set out above West Firsby oilfield recoverable amount of £250,000 is less than its
carrying amount by £160,000 and therefore an impairment has been recognised in the year (2019: No
impairment). The recoverable amount was calculated at a discount rate of 10% (2019: 10%).
Sensitivity to key assumption changes
Variations to the key assumptions used in the value-in-use calculation would cause impairment of the
producing fields as follows:
Further impairment of
producing fields £000
Production decline rate (current assumption 5-12%)
12%
15%
Brent crude price per barrel (current assumption US$42/bbl in
2021 rising to US$61/bbl in 2023)
$42 flat
$50 flat
Pre-tax discount rate (current assumption 13.4%)
20%
25%
Property, plant & equipment - Company
Furniture &
computers
£000
Right of use
assets
£000
Cost
At 1 August 2018
Additions
At 31 July 2019
At transition
Additions
Disposals
At 31 July 2020
Depreciation
At 1 August 2018
Charge for the year
At 31 July 2019
Charge for year
Disposals
At 31 July 2020
Net Book Value
At 31 July 2018
At 31 July 2019
At 31 July 2020
-
-
-------------------------------
-
117
-
-
-------------------------------
117
===============================
-
-
-------------------------------
-
65
-
-------------------------------
65
===============================
-
===============================
-
===============================
52
===============================
52
1
-------------------------------
53
-
3
(50)
-------------------------------
6
===============================
51
1
-------------------------------
52
1
(50)
-------------------------------
3
===============================
1
===============================
1
===============================
3
===============================
52
55
279
531
111
310
725
Total
£000
52
1
-------------------------------
53
117
3
(50)
-------------------------------
123
===============================
51
1
-------------------------------
52
66
(50)
-------------------------------
68
===============================
1
===============================
1
===============================
55
===============================
Europa Oil & Gas (Holdings) plc
13
Investments - Group
Investment in shares
At 1 August
Current year additions
Write off on revaluation
At 31 July
2020
£000
241
-
(197)
-----------------------------------------
44
===========================
2019
£000
-
241
-
-----------------------------------------
241
=========================
On 8 May 2019, the Group sold its interest in PEDL143 to UK Oil & Gas Plc (‘UKOG’) for 25,951,557
UKOG shares. At the time of the sale the shares were worth 1.156p each, resulting in a total value of
£300,000. The investment was revalued at the year end to the value of £44,000 (0.17p per share) (2019:
£241,000 (0.93p per share) with the loss being recorded in Other Comprehensive Income (note 9).
Investments - Company
Investment in subsidiaries
At 1 August
Current year additions
At 31 July
2020
£000
2,341
-
-----------------------------------------
2,341
===========================
2019
£000
2,341
-
-----------------------------------------
2,341
=========================
The Company’s investments at the reporting date include 100% of the share capital in the following unlisted
companies:
the UK.
• Europa Oil & Gas Limited, which undertakes oil and gas exploration, development and production in
• Europa Oil & Gas (West Firsby) Limited, which is non-trading.
• Europa Oil & Gas (Ireland West) Limited, which held the interest in the FEL 2/13 licence.
• Europa Oil & Gas (Ireland East) Limited, which held the interest in the FEL 3/13 and FEL 1/17
• Europa Oil & Gas (Inishkea) Limited, which holds the interest in the FEL 4/19 and FEL 3/19 licences.
• Europa Oil & Gas (New Ventures) Limited, which holds the interest in the Moroccan licence.
All six companies are registered in England and Wales, all having their registered office at 6 Porter Street, London
W1U 6DD.
The results of the six companies have been included in the consolidated accounts.
licences.
Europa Oil & Gas Limited owns 100% of the ordinary share capital of Europa Oil & Gas (UK) Limited
(registered in England and Wales and non-trading).
14
Inventories - Group
Oil in tanks
15
Trade and other receivables
2020
£000
12
======================================
2019
£000
19
======================================
53
Europa Oil & Gas (Holdings) plc
Current trade and other receivables
Trade receivables
Other receivables
Prepayments
Non-current other receivables
Owed by Group undertakings (note 24)
Group
Company
2020
£000
111
25
98
-----------------------------------
234
===================================
-
===================================
2019
£000
173
33
109
-----------------------------------
315
===================================
2020
£000
-
2
51
-----------------------------------
53
===================================
2019
£000
-
9
70
-----------------------------------
79
===================================
-
===================================
430
===================================
1,038
===================================
16
Restricted cash
Cash guarantee
Group
Company
2020
£000
245
===================================
2019
£000
251
===================================
2020
£000
-
===================================
2019
£000
-
===================================
A requirement of the petroleum agreement with the National Office of Hydrocarbons and Mines (‘ONHYM’),
was the setting up of a guarantee for $315,000 (£245,000) (2019: $315,000 (£251,000)). This is treated as
restricted cash.
17
Trade and other payables
Current trade and other payables
Trade payables
Other payables
Non-current trade and other payables
Lease liabilities
Group
Company
2020
£000
507
506
--------------------------------------
1,013
================================
31
================================
2019
£000
823
263
--------------------------------------
1,086
================================
-
================================
2020
£000
364
151
---------------------------------------
515
=====================================
17
=====================================
2019
£000
575
85
---------------------------------------
660
=====================================
-
=====================================
18
Borrowings
Loans repayable in less than 1 year
Bounce Back Loan
Total short term borrowing
Loans repayable in 1 to 2 years
Bounce Back Loan
Loans repayable in 2 to 5 years
Bounce Back Loan
Loans repayable in over 5 years
Bounce Back Loan
2020
£000
2
--------------------------------------
2
================================
10
30
8
Group
Company
2019
£000
-
--------------------------------------
-
================================
2020
£000
2
---------------------------------------
2
=====================================
2019
£000
-
---------------------------------------
-
=====================================
-
-
-
10
30
8
-
-
-
Total long term borrowing
--------------------------------------
48
================================
--------------------------------------
-
================================
---------------------------------------
48
=====================================
---------------------------------------
-
=====================================
54
Europa Oil & Gas (Holdings) plc
In June 2020 the Group received a Bounce Back loan for £50,000 under the Government’s Covid 19 policies.
The loan is to be repaid within 6 years of drawdown but with a 12 month holiday so repayments will start in
June 2021 and will be repaid over the following 5 years. The annual rate of interest is 2.5%.
19
Leases
There were no retrospective adjustments as a result of adopting IFRS 16 ‘Leases’. The Group amended
accounting policies applied from 1 August 2019 are disclosed in Note 1 under ‘Significant accounting policies’.
IFRS 16 specifies how to recognise, measure, present and disclose leases. The standard provides a single lessee
accounting model, requiring lessees to recognise right-of-use assets and lease liabilities for all material leases. It
results in almost all leases being recognised on the balance sheet by lessees, as the distinction between
operating and finance leases was removed. Under the new standard, an asset (the right to use the leased item)
and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases.
The Group adopted IFRS 16 from 1 August 2019 using the modified retrospective approach and accordingly
the information presented for 2018 is not restated. It remains as previously reported under IAS 17 and related
interpretations. On initial application, the Group elected to record right-of-use assets based on the
corresponding lease liability. A right-of-use asset and lease obligations of £147,000 were recorded as of 1
August 2019, with no net impact on retained earnings. When measuring lease liabilities, the Group discounted
lease payments using its incremental borrowing rate at 1 August 2019. The weighted-average rate applied is
5%.
The balance sheet shows the following amounts relating to leases
Asset
Office lease
Company van
Company van
Company van
Company van
Total
1 August 2019 Depreciation
charge for the
year
£000
(57)
(4)
(4)
(4)
(4)
-------------------------------
(73)
===============================
£000
80
20
18
20
9
-------------------------------
147
===============================
31 July 2020
£000
23
16
14
16
5
-------------------------------
74
===============================
Lease liability
Balance at 1
August 2019
Payments
made in year
Office lease
Company van
Company van
Company van
Company van
Lease liability
Current
Non-current
At 31 July 2020
£000
80
20
18
20
9
--------------------
147
========================
£000
(55)
(6)
(5)
(6)
(4)
----------------------
(76)
===========================
55
Payment
allocation
from prior
year
prepayments
£’000
(8)
-
-
-
-
----------------------
(8)
===========================
Interest
element of
payments
Balance at 31
Jul 2020
£000
2
1
-
-
-
---------------------
3
===========================
£000
19
15
13
14
5
----------------------
66
===========================
35
31
--------------------
66
===============
Europa Oil & Gas (Holdings) plc
The income statement shows the following amounts relating to leases:
Interest on lease liabilities (included in finance cost)
Expenses related to leases of land for extraction of oil & gas
Total
Amounts recognised in the statement of cashflows
Total cash outflow for leases
31 July 2020
£000
3
42
-------------------------------
45
===============================
31 July 2020
£000
76
===============================
The following table reconciles the Group’s operating lease obligations at 31 July 2019, as disclosed in the
Group’s consolidated financial statements, to lease obligations recognised on initial application of IFRS 16 at 1
August 2019.
Operating lease commitment at 31 July 2019
Discounted using the incremental borrowing rate
Leases that are exempt – land lease for oil & gas
Company van leases
Early redemption of office lease
Total
20
Deferred Tax – Group
Recognised deferred tax asset:
As at 1 August
(Charged)/credited to statement of comprehensive income
At 31 July
31 July 2020
£000
138
===============================
133
(5)
68
(49)
-------------------------------
147
===============================
2020
£000
-
-
------------------------------------------
-
=====================================
2019
£000
-
-
------------------------------------------
-
=====================================
The Group has a deferred tax liability of £1,114,000 (2019: £1,098,000) arising from accelerated capital
allowances and a deferred tax asset of £1,114,000 (2019: £1,098,000) arising from trading losses which will be
utilised against future taxable profits. These were offset against each other resulting in a £nil net asset/liability
(2019: £nil net asset/liability). This offsetting was required because the Group settles current tax assets and
liabilities on a net basis.
Non-recognised long-term deferred tax asset
The Group has a non-recognised deferred tax asset of £4,359,000 (2019: £4,116,000), which arises in relation
to ring-fence UK trading losses of £4.6 million (2019: £6.3 million), non-ring-fence UK trading losses of £11.7
million (2019: £11.7 million) and subsidiary losses of £1.8 million (2019: subsidiary losses of £4.7 million) that
have not been recognised in the accounts as the timing of the utilisation of the losses is considered uncertain.
No deferred tax assets or liabilities are recognised in the Company.
21
Provisions – Group
Decommissioning provisions are based on third party estimates of work which will be required and the
judgement of Directors. By their nature, the detailed scope of work required and timing are uncertain.
56
Europa Oil & Gas (Holdings) plc
Long-term provisions
As at 1 August
Charged to statement of comprehensive income (note 7)
At 31 July
2020
£000
2,917
246
--------------------------------
3,163
================================
2019
£000
2,735
182
--------------------------------
2,917
===============================
Sensitivity to key assumption changes
Variations to the key assumptions used in the decommissioning provision estimates would cause increases /
(reductions) to the provision as follows:
Inflation rate (current assumption 3%)
2%
4%
Discount rate (current assumption 10%)
5%
15%
No provisions have been recognised in the Company.
22
Called up share capital
Allotted, called up and fully paid ordinary shares of 1p
At 1 August 2019: 444,691,599 shares (1 August 2018: 301,388,379)
Issued in the year: nil (2019: 143,303,220 shares)
At 31 July: 444,691,599 shares (2019: 444,691,599)
Further
decommissioning
provision £000
(187)
200
1,121
(746)
2019
£000
3,014
1,433
--------------------------------
4,447
=============
2020
£000
4,447
-
--------------------------------
4,447
============
Ordinary shares issued
Date
Type of
Issue
Number of
shares
Issue
price
10 December 2018 Placing
10 December 2018 Open offer
Total
3p
3p
133,333,338
9,969,882
---------------------------------------------------------
143,303,220
=================
Raised
gross
£000
4,000
299
--------------------------------
4,299
=========
Raised net
of costs
£000
3,692
270
--------------------------------
3,962
=========
Nominal
value
£000
1,333
100
--------------------------------
1,433
=========
The costs of £337,000 incurred on the issue of share capital include £17,000 of non-cash expenses.All of the
allotted shares are ordinary shares of the same class and rank pari passu. The following describes the purpose of
each reserve within owners’ equity:
Reserve
Share premium
Merger reserve
Retained deficit
Description and purpose
Amount subscribed for share capital in excess of nominal value
Reserve created on issue of shares on acquisition of subsidiaries in prior years
Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income
23
Share-based payments
The Group operates an approved Enterprise Management Incentive (‘EMI’) share option scheme for employees
and an unapproved scheme for grants in excess of EMI limits and for non-employees. Both schemes are equity-
settled share-based payments as defined in IFRS 2 Share-based payments. A recognised valuation methodology
is employed to determine the fair value of options granted as set out in the standard. The charge incurred relating
to these options is recognised within operating costs.
Combined information for the two schemes operated by the Group is set out below.
There are 24,203,458 ordinary 1p share options outstanding (2019: 24,238,458).
57
Europa Oil & Gas (Holdings) plc
These are held as follows:
Holder
RJHM Corrie
P Greenhalgh
HGD Mackay
BJ O’Cathain
SG Oddie
SA Williams
Employees of the Group
Consultants and advisers
Total
31 July 2020
31 July 2019
450,000
3,900,000
11,700,000
1,200,000
1,200,000
1,200,000
2,330,000
2,223,458
---------------------------------------------------
24,203,458
====================
450,000
4,525,000
11,700,000
1,200,000
1,200,000
-
2,490,000
2,673,458
---------------------------------------------------
24,238,458
====================
The fair values of all options were determined using a Black Scholes Merton model. Volatility is based on the
Company's share price volatility since flotation.
In the year 1,200,000 options were granted, 1,235,000 expired, none were forfeited, and none were exercised
(2019: 2,223,458 granted, 1,399,440 expired, none forfeited, none exercised).
Outstanding at the start of the year
Granted
Expired
Forfeited
Outstanding at the end of the year
Exercisable at the end of the year
2020
Number of
options
24,238,458
1,200,000
(1,235,000)
-
-------------------------------------------------
24,203,458
12,583,458
2020
Average
exercise
price
8.76p
1.28p
13.09p
-
-----------------------------------
8.16p
9.48p
2019
Number of
options
2019
Average
exercise price
23,414,440
2,223,458
(1,399,440)
-
-------------------------------------------------
24,238,458
13,368,458
9.14p
3p
6p
-
-----------------------------------
8.76p
9.86p
The 1,200,000 options granted in 2020 vest 400,000 after each of 18, 30 and 42 months, are exercisable
conditional upon the Europa Oil & Gas (Holdings) plc closing average mid-market share price being above 3p
for 30 consecutive trading day and expire on the 10th anniversary of the grant date. The inputs used to determine
their values are detailed in the table:
Grant date
Number of options
Share price at grant
Exercise price
Volatility
Dividend yield
Risk free investment rate
Option life in years
Fair value per option
12 March 2020
1,200,000
1.3p
1.28p
57.5%
nil
0.0089%
5
0.32p
The 2,223,458 options granted in 2019 are subject to no further vesting conditions and expire on the second
anniversary of the grant date. The inputs used to determine their values are detailed in the table:
Grant date
Number of options
Share price at grant
Exercise price
Volatility
Dividend yield
Risk free investment rate
Option life in years
Fair value per option
10 December 2018
2,223,458
2.8p
3.0p
70%
nil
0.66%
1.5
0.79p
Based on the fair values above, the charge arising from employee share options was £3,000 (2019: £nil). The
charge relating to non-employee share options was £nil (2019: £nil). The charge allocated direct to equity,
relating to the issue of options on the issue of share capital, was £nil (2019: £nil).
58
Europa Oil & Gas (Holdings) plc
Share options outstanding at the end of the period have exercise prices ranging from 1.28p to 16p and the
weighted average remaining contractual life at the end of the period was 2 years (2019: 5 years).
24
Financial instruments
The Group’s and Company’s financial instruments comprise cash and cash equivalents, bank borrowings, loans,
and items such as trade and other receivables and trade and other payables which arise directly from its
operations. Europa’s activities are subject to a range of financial risks, the main ones being credit; liquidity;
interest rates; commodity prices; foreign exchange; and capital. These risks are managed through ongoing review
considering the operational, business and economic circumstances at that time.
Financial assets
Amortised cost
Amortised cost
Investments
Trade and other receivables
Restricted cash
Cash and cash equivalents
Total financial assets
2020
£’000
-
136
245
768
--------------------
1,149
2019
£’000
-
206
251
2,905
--------------------
3,362
Fair value
through other
comprehensive
income
Fair value
through other
comprehensive
income
2020
£’000
44
-
-
-
2019
£’000
241
-
-
-
-----------------------
44
--------------------------
241
================================
================================
=====================================
=====================================
Financial liabilities
Amortised cost
Amortised cost
Trade and other payables
Loans
Total financial liabilities
2020
£’000
(1,044)
(50)
--------------------
(1,094)
2019
£’000
(1,086)
-
----------------------
(1,086)
Fair value
through other
comprehensive
income
Fair value
through other
comprehensive
income
2020
£’000
-
-
2019
£’000
-
-
---------------------
-----------------------
-
-
================================
================================
=====================================
=====================================
Credit risk
The Group is exposed to credit risk as all crude oil production is sold to one multinational oil company. The
customer is invoiced monthly for the oil delivered to the refinery in the previous month and invoices are settled
in full on the 15th of the following month. At 31 July 2020 trade receivables were £96,000 representing one
month of oil revenue (2019 £173,000 representing one month of oil revenue and receivables due from project
partners). The fair value of trade receivables and payables approximates to their carrying value because of their
short maturity. Any surplus cash is held on short-term deposit with Royal Bank of Scotland. The maximum
credit exposure in the year was £137,000 being the highest month’s oil revenue (2019: £169,000). The Company
exposure to third party credit risk is negligible. The intercompany balances with its subsidiaries have been
provided due to the questionability of their recovery.
Liquidity risk
59
Europa Oil & Gas (Holdings) plc
The Company currently has no overdraft or overdraft facility with its bankers.
The Group and Company monitor their levels of working capital to ensure they can meet liabilities as they fall
due. The following table shows the contractual maturities (representing the undiscounted cash flows) of the
Group’s and Company’s financial liabilities.
At 31 July
6 months or less
Total
At 31 July
6 to 12 months
1 to 2 years
2 to 5 years
Over 5 years
Total
Group
Trade and other payables
2019
£000
1,086
--------------------------------------
1,086
================================
2020
£000
1,013
--------------------------------------
1,013
================================
Company
Trade and other payables
2020
£000
515
---------------------------------------
506
=====================================
2019
£000
660
---------------------------------------
660
=====================================
Group
Loans
Company
Loans
2020
£000
2
10
30
8
--------------------------------------
50
================================
2019
£000
-
-
-
-
--------------------------------------
-
================================
2020
£000
2
10
30
8
---------------------------------------
50
=====================================
2019
£000
-
-
-
-
---------------------------------------
-
=====================================
Cash and cash equivalents in both Group and Company are all available at short notice.
Trade and other payables do not normally incur interest charges. There is no difference between the fair value
of the trade and other payables and their carrying amounts.
Interest rate risk
The Group has no interest bearing liabilities.
Commodity price risk
The selling price of the Group’s production of crude oil is set at a small discount to Brent prices. The table
below shows the range of prices achieved in the year and the sensitivity of the Group’s loss before taxation
(‘LBT’) to such movements in oil price. There would be a corresponding increase or decrease to net assets.
There is no commodity price risk in the Company.
Oil price
Highest
Average
Lowest
Month
December 2019
April 2020
2020
Price
US$/bbl
$65.80
$48.50
$18.20
2020
LBT
£000
(4,991)
(5,440)
(6,216)
2019
Price
US$/bbl
79.7
66.7
56.4
2019
LBT
£000
(319)
(654)
(917)
Foreign exchange risk
The Group’s production of crude oil is invoiced in US$. Revenue is translated into Sterling using a monthly
exchange rate set by reference to the market rate. The table below shows the range of average monthly US$
exchange rates used in the year and the sensitivity of the Group’s LBT to similar movements in US$ exchange.
There would be a corresponding increase or decrease in net assets.
US Dollar
Highest
Average
Lowest
Month
December 2019
August 2019
2020
Rate
US$/£
1.321
1.271
1.218
2020
LBT
£000
(5,477)
(5,440)
(5,376)
2019
Rate
US$/£
1.330
1.287
1.225
2019
LBT
£000
(710)
(654)
(568)
The table below shows the Group’s currency exposures. Exposures comprise the net financial assets and
liabilities of the Group that are not denominated in the functional currency.
60
Europa Oil & Gas (Holdings) plc
Currency Item
Euro
Cash and cash equivalents
Trade and other payables
US Dollar Cash and cash equivalents
Trade and other receivables
Total
Group
Company
2020
£000
57
(352)
355
100
----------------------------
160
============================
2019
£000
5
(500)
229
158
----------------------------
(108)
============================
2020
£000
5
(483)
7
-
----------------------------
(471)
============================
2019
£000
5
(483)
7
-
----------------------------
(471)
============================
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and maintain an optimal capital structure to reduce the cost
of capital. The Group defines capital as being the consolidated shareholder equity (note 22) and bank borrowings
(currently £50,000). The Board monitors the level of capital as compared to the Group’s long-term debt
commitments and adjusts the ratio of debt to capital as is determined to be necessary, by issuing new shares,
reducing or increasing debt, paying dividends and returning capital to shareholders. The Group has a £50k loan
subject to an annual 2.5% interest charge and repayable over 6 years with a 1 year holiday.
Intercompany loans
The loans to the subsidiaries are classified as repayable on demand. IFRS 9 requires consideration of the expected
credit risk associated with the loan. As the subsidiary company does not have any liquid assets to sell to repay
the loan, should it be recalled, the conclusion reached was that the loan should be categorised as stage 3.
As part of the assessment of expected credit losses of the intercompany loan receivable, the Directors have
considered the published chance of success for Inishkea, and applying the same 33% general wildcat exploration
success rate to Inezgane, the loans to Europa Oil & Gas Inishkea and Europa Oil & Gas New Ventures have
thus been 67% provided.
The loan to Europa Oil & Gas (Ireland West) and Europa Oil & Gas (Ireland East) have been provided in full
due to the relinquishment of the licence held by the subsidiaries.
The movement in the provision was as follows:
Europa
Oil &
Gas
Limited
£000
14,988
-
1,529
---------------------------------
16,517
2,068
---------------------------------
18,585
=============
14,988
1,529
16,517
2,068
18,585
(14,988
(1,529)
)
(16,517
(2,068)
)
Europa
Oil &
Gas
(Ireland
West)
Limited
£000
-
392
113
---------------------------------
505
258
---------------------------------
763
=============
Europa
Oil &
Gas
(Ireland
East)
Limited
£000
-
765
196
---------------------------------
961
519
---------------------------------
1,480
=============
1,142
292
1,434
46
1,480
(765)
(196)
(961)
(519)
585
169
754
9
763
(392)
(113)
(505)
(258)
61
Provision at 1 August 2018
Opening adjustments under IFRS 9
Increase in the year
Provision at 31 July 2019
Movement in the year
Provision at 31 July 2020
Gross loan balances
At 31 July 2018
Movement in loan
Loan balance at 31 July 2019
Movement in loan
Loan balance at 31 July 2020
Provisions
Provision at 31 July 2018
Movement in loan provision
Provision at 31 July 2019
Movement in provision
Europa
Oil &
Gas
(Inishkea)
Limited
Europa
Oil &
Gas (New
Ventures)
Limited
£000
£000
38
-
178
---------------------------------
216
121
---------------------------------
337
=============
38
286
324
180
504
-
276
148
---------------------------------
424
109
---------------------------------
533
=============
412
220
632
164
796
(276)
(148)
(424)
(109)
Total
£000
15,026
1,433
2,164
---------------------------------
18,623
3,075
---------------------------------
21,698
=============
17,165
2,496
19,661
2,467
22,128
(38)
(178)
(216)
(121)
(16,459)
(2,164)
(18,623)
(3,075)
Europa Oil & Gas (Holdings) plc
Provision at 31 July 2020
Net loan balance at 1 August 2018
Net loan balance at 31 July 2019
2012018
Net loan balance at 31 July 2020
(18,585
)
-
-
-
(763)
(1,480)
(533)
(337)
(21,698)
193
249
-
377
473
-
136
208
263
-
108
167
706
1,038
430
25
Capital commitments and guarantees
The outstanding work commitments on the Irish licences total £0.7 million and are detailed below:
• FEL 1/17: prepare an updated play and prospect assessment for PAD – total £minimal.
• FEL 4/19: undertake a site survey at the Inishkea location, complete well design and engineering,
investigate commerciality of the 18/20-7 discovery – total £0.7 million.
• FEL 3/19: no outstanding commitments.
On the UK licences PEDL299 (Hardstoft) and PEDL343 (Cloughton) there is a commitment to acquire seismic
and Europa’s share of combined cost is expected to be £1.25 million.
The Inezgane Offshore licence awarded post the reporting date carries a commitment to reprocess 1,300km2 of
existing 3D seismic with an estimated cost of £0.5 million. 50% of the cost of the work has been guaranteed as
referenced in note 16. If the Group was not to complete the work commitment the licence would be
relinquished, and the guarantee not released.
If the Group is not able to raise funds, farm-down, or extend licences; or elects not to continue in an exploration
licence, then the impact on the financial statements will be the impairment of the relevant intangible asset
disclosed in note 11.
26
Operating lease commitments
Europa Oil & Gas Limited pays annual site rentals for the land upon which the West Firsby and Crosby Warren
oil field facilities are located.
• The West Firsby lease runs until September 2022 and can be terminated on two months’ notice. The
annual cost is currently £22,000 (2019: £21,000) increasing annually in line with the retail price index.
• The Crosby Warren lease runs until December 2022 and can be terminated on three months’ notice.
The annual cost is currently £20,000 (2019: £20,000).
Future minimum lease payments are as follows:
Less than 1 year
2-5 years
Total
2020
£000
9
-
---------------------------------
9
============
2019
£000
60
78
---------------------------------
138
=============
27
Related party transactions
Key management are those persons having authority and responsibility for planning, controlling and directing
the activities of the Group. In the opinion of the Board, the Group’s and the Company’s key management are
the Directors of Europa Oil & Gas (Holdings) plc. Information regarding their compensation is given in note
4.
During the year, the Company provided services to subsidiary companies as follows:
Europa Oil & Gas Limited
Europa Oil & Gas (Ireland West) Limited
Europa Oil & Gas (Ireland East) Limited
Europa Oil & Gas (Inishkea) Limited
Europa Oil & Gas (New Ventures) Limited
Total
62
2020
£000
1,496
3
6
25
57
---------------------------------
1,587
============
2019
£000
1,456
6
10
18
2
---------------------------------
1,492
=============
Europa Oil & Gas (Holdings) plc
At the end of the year, after provisions, the Company was owed the following amounts by subsidiaries:
Europa Oil & Gas (Ireland West) Limited
Europa Oil & Gas (Ireland East) Limited
Europa Oil & Gas (Inishkea) Limited
Europa Oil & Gas (New Ventures) Limited
Total
2020
£000
-
-
263
167
---------------------------------
430
============
2019
£000
249
473
209
107
---------------------------------
1,038
=============
28 Post reporting date events
In August 2020, site works commenced at the Wressle oil field.
Also in August, Simon Oddie was appointed as CEO on a permanent basis, Senior Independent Non-Executive
Director Mr Brian O’Cathain was appointed Non-Executive Chairman and the Board increased the reduction
in their salary and fees to 50%
63
Europa Oil & Gas (Holdings) plc
Directors and advisers
Company registration number
5217946
Registered office
Directors
Secretary
Banker
Solicitor
Auditor
Nominated adviser and broker
Registrar
6 Porter Street
London
W1U 6DD
CW Ahlefeldt-Laurvig – Non-Executive Director
P Greenhalgh – Finance Director
BJ O’Cathain – Non-Executive Chairman (from 4 August 2020,
previously Non-Executive Director)
SG Oddie – Chief Executive Officer (from 4 August 2020, Interim
CEO and Executive Chairman from 21 November 2019, previously
Non-Executive Chairman)
SA Williams - Non-Executive Director (from 12 March 2020)
RJHM Corrie - Non-Executive Director (to 12 March 2020)
HGD Mackay - Chief Executive Officer (to 21 November 2019)
P Greenhalgh
Royal Bank of Scotland plc
1 Albyn Place
Aberdeen
AB10 1BR
Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
BDO LLP
55 Baker Street
London
W1U 7EU
finnCap Ltd
60 New Broad Street
London
EC2M 1JJ
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
64