UK oil & gas firm buys into license off Equatorial Guinea in ‘potentially transformational deal’

UK-headquartered Europa Oil & Gas has entered into a license offshore Equatorial Guinea with the acquisition of an equity interest in Antler Global.

Source: Europa Oil & Gas

Europa Oil & Gas has acquired a 42.9% equity interest in Antler Global which holds an 80% working interest in the recently acquired and highly prospective EG-08 production sharing contract (PSC) offshore Equatorial Guinea, with the national oil company Guinea Ecuatorialde Petroleos (GEPetrol) holding the remaining 20%.

The UK-headquartered oil and gas player said that this subscription adds an additional geographical location to its existing portfolio of assets and one which the board believes has enormous near-term, infrastructure-led, near-field exploration potential.

“We are very excited about this potentially transformational deal for Europa, which adds another high impact exploration prospect to our portfolio and ties with our strategic approach to replenishing the portfolio with potentially high impact but relatively low risk prospects,” said Will Holland, Chief Executive Officer of Europa Oil & Gas.

“Equatorial Guinea is an enormous opportunity for us and provides us with near-term drilling activity targeting over 1 TCFE of recoverable resource in an area with a well-developed upstream industry and a highly supportive government. I am also pleased to report that we have solid support from many of our institutional investors for this acquisition.”

The subscription monies received by Antler will fund the first-year work program costs, including the acquisition of existing 3D seismic data, which will be reprocessed alongside preparations to drill, whilst ensuring all financial obligations under the EG-08 PSC with the Republic of Equatorial Guinea and GEPetrol are met.

The EG-08 license has a first exploration period of four years with a drill or drop deadline after two years.

While the initial two-year term of the license does not require the drilling of a well, the company believes it already has drill-ready prospects, which consist of three independent targets, with estimated total prospective resources of 1.4 trillion cubic feet of gas equivalent (TCFE).

Antler will commence a farm-down process with a view to bringing in a partner for drilling. The resource prospectivity of EG-08 has only been examined at one stratigraphic horizon, which is analogous to discoveries made in the adjoining block operated by Chevron. However, further prospectivity exists in multiple horizons and these are yet to be evaluated, Europa Oil & Gas reported.

Under the terms of the subscription, Europa Oil & Gas shall pay Antler an aggregate consideration of $3 million, payable in four installments, with the first being shortly following entering into the subscription agreement and the final in October 2024.

In addition, the two companies and their founding shareholders have entered into a shareholder agreement with customary protections and restrictions, including that each of Europa and Antler’s founding shareholders shall have the right to appoint one director to the board of Antler, all decisions made by the board of Antler must be unanimous, and an agreement that all oil and gas assets in Equatorial Guinea are covered by area of mutual interest (AMI) provisions.