LONDON (ShareCast) - (Sharecast News) - Europa Oil issued a statement urging shareholders to vote in favour of its proposed £7m fundraising on Friday morning, as investors gathered for a general meeting over the plans.
The AIM-traded firm was holding a vote to allow it to raise £7.02m through the issue of 390 million new shares at a price of 1.8p each, to fund the Serenity acquisition in the central North Sea.

It said the Serenity acquisition is for a 25% stake in a discovered oil field majority-owned by i3 Energy, which required further appraisal to delineate the field and progress it to development.

"An appraisal well is scheduled to be drilled in the late summer this year, and should it be successful, it will add material value to existing shareholders as it will de-risk a large volume of hydrocarbons located close to existing infrastructure," said chairman Brian O'Cathain.

"This acquisition allows Europa to deliver on its promise to diversify its portfolio by adding an appraisal asset and strengthen Europa's existing producing and high-impact exploration assets.

"To this end, the board and I firmly believe that the opportunity to acquire the stake in Serenity is ideal, not just from a growth perspective but also from a strategic perspective as it complements our existing asset base."

O'Cathain described the timing of this proposed acquisition as "highly appropriate", given the recent political focus on the development of North Sea oil and gas resources and the securing of UK domestic energy supplies.

"Oil is considered essential to the global energy transition to net zero, a theme which is at the forefront of the current UK and international energy policy agenda."

With drilling set to start in the late summer, Brian O'Cathain said Europa saw Serenity as a "highly exciting asset", with the potential to deliver significant near-term value for shareholders and sufficient recoverable volumes for a standalone development.

"The well planning for the appraisal well has already been completed by i3 Energy, which has extensive regional subsurface knowledge and operational experience, and is thus an excellent partner and operator to deliver on Serenity's potential."

The proposed acquisition would see Europa earn 25% interest by paying 46.25% of the appraisal well cost, equivalent to a 1.85-to-one carry.

Europa said the carry would be capped at a gross well cost of £15m, of which its interest would total £6.94m.

Following the initial capital injection, each party would fund its interests proportionally.

"I would like to note that our CEO Simon Oddie, director William Ahlefeldt-Laurvig and I all participated in the placing, which I hope marks an unequivocal endorsement of our unerring confidence in the proposed acquisition and the enormous potential it can deliver," O'Cathain said.

"We hope you will show us your support as we seek to catapult Europa into the next stage of its growth trajectory at a time when energy security and stability of supply is of critical importance globally."

At 1022 GMT, shares in Europa Oil & Gas Holdings were up 19.05% at 2.5p.

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