Europa on the hunt for farm out partner as US firm Kosmos ditches Irish interests
British firm Europa Oil and Gas is on the hunt for a new associate to help progress its potentially lucrative exploration licences off the Irish coast after its partner Kosmos decided to withdraw from the project.
US exploration company Kosmos Energy yesterday announced it is to withdraw from the venture, comprising two licences in an area known as the Porcupine Basin.
Kosmos had been the licence operator on the project after Europa farmed out an 85pc interest in both licences to it in April 2013. After taking over as the project operator, Kosmos was liable to incur 100pc of the costs of the first exploration wells at the two licences subject to investment caps of $90m and $110m. Any costs thereafter would have been shared by the two companies proportional to their stake in the project.
Kosmos had been looking for a partner to help split the costs of the project, however the company was unsuccessful. It recently made a large gas discovery in Mauritania and has decided to focus on that project.
A spokesman told the Irish Independent: "The decision to withdraw from Ireland was based on the need to prioritise opportunities in our exploration portfolio. We have just had a major gas discovery and we will be focusing our resources and attention on exploration in that region." He added: "Our exploration experience in Ireland was positive and we would consider re-entering the Irish market."
Kosmos' stake will now transfer to Europa, which will retain 100pc of the licences. Earlier this year, Europa estimated its 15pc interest in one of the two licences had a risked value of $251m based on a prior competent persons report which estimated there to be a prospective 1.5bn barrels in the licence area.
Europa chief executive Hugh Mackay said that while Europa is disappointed with Kosmos' choice, the company will look to secure another farmout partner.
Kosmos had previously flagged late 2016 or 2017 as a likely target for drilling. Asked when drilling might take place, Mr Mackay said: "It depends on how quickly we land a farm out partner. From when they commit to the project it could take about a year to start drilling.
"The constraint is the partner, once it's farmed out we lose control and it is drilled according to their timetable, but if we got it [a partnership] secured in the next year realistically we could start by 2017."