LONDON (ShareCast) - (Sharecast News) - Europa Oil & Gas shares were surging on Monday, after it announced that its associated company Antler Global had signed a non-binding heads of terms with a major energy firm regarding the proposed farm-out of an interest in the EG-08 production sharing contract (PSC) offshore Equatorial Guinea.
The AIM-traded Europa holds a 42.9% equity stake in Antler, which in turn owns an 80% working interest in the EG-08 PSC.

The remaining 20% interest is held by GEPetrol, the national oil company of Equatorial Guinea.

It said the signed heads of terms marked the start of detailed commercial negotiations, but Europa cautioned there was no certainty that the talks would result in a binding agreement.

Any deal would also require approval from the country's Minister for Energy.

The EG-08 block contains an estimated 2.116 trillion cubic feet of gas, with the primary Barracuda prospect estimated at 798 billion cubic feet.

"The signing of these heads of terms is a very positive step forward and comes after an extensive period of negotiations with what we believe is an excellent partner," said Europa CEO William Holland.

"Although there are no guarantees, I am confident that we will progress to signing a farm out agreement in the coming months and will then move to drilling the Barracuda well as soon as possible thereafter.

"I look forward to updating the market of our progress in due course."

At 1502 BST, shares in Europa Oil & Gas Holdings were up 29.8% at 0.65p.

Reporting by Josh White for Sharecast.com.

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