Highlights

  • Antler farms out 40% EG-08 interest, with partner funding majority of Barracuda well costs.
  • Barracuda prospect estimated at 893 BCF within broader 2.213 TCF resource assessment.
  • Drilling of Barracuda well targeted during 2026, subject to regulatory approvals.

Europa Oil & Gas (LSE:EOG) plc has reported that its associated company, Antler Global Limited, has signed a binding farm-out agreement with Fuhai (Beijing) Energy Limited covering the EG-08 production sharing contract offshore Equatorial Guinea. Under the agreement, Fuhai will acquire a 40% working interest in the block, while Antler will retain operatorship.

The arrangement sets out funding terms for the planned Barracuda exploration well. Fuhai will fund 95% of the drilling and testing costs, subject to a total well cost cap of USD 53 million. Antler will fund the remaining 5%. Any expenditure above the agreed cap will be shared equally between the two parties.

Cost Recovery and Interest Terms
The agreement provides that, in the event of commercial hydrocarbon production, Fuhai will have a preferential right to recover the carried costs from project cash flows. A portion equal to 45% of the carried amount will accrue interest, capped at 5% per annum, from the time funding is provided until full recovery. This interest provision will not apply if the Barracuda prospect does not result in a commercial discovery.

Completion of the transaction remains conditional on approval from Equatorial Guinea’s Ministry for Mining and Hydrocarbons Department, as well as Overseas Direct Investment approval from authorities in China’s Shandong Province.

Licence Ownership and Europa Exposure
Following the farm-out, the EG-08 PSC will be held 40% by Antler, 40% by Fuhai, and 20% by GEPetrol, the national oil company of Equatorial Guinea, representing the state’s interest. Europa holds a 42.9% equity interest in Antler, translating into a net attributable interest of 17.2% in the EG-08 block.

As the licence is at a pre-production stage, Europa reported a loss of GBP 2,000 in its 2024 annual report relating to its interest in Antler, reflecting limited pre-operational expenditure.

Resource Estimates and Drilling Plans
Updated geophysical analysis has indicated prospective resources of 2.213 TCF (Pmean) across the EG-08 block. The Barracuda prospect remains the primary target, with estimated volumes of 893 BCF (Pmean). Antler has stated that drilling of the Barracuda well is expected to take place in 2026, following completion of regulatory approvals and preparatory work.

Share Performance
EOG shares closed at GBX 1.83 on December 30.