By Mark Williamson
AN oil and gas independent has underlined its appetite for more acquisitions after buying into a UK find that it plans to bring into production.
Europa Oil & Gas reckons it is well placed to expand as it generates significant amounts of cash from onshore production in the UK, although crude prices fell to a year-low yesterday amid uncertainty about the outlook for the market.
Brent crude traded down $1.33 per barrel yesterday afternoon, at $78.02/bbl. This was the lowest level reached since before Russia launched its war on Ukraine.
The fall followed a sharp drop in the price on Tuesday as traders worried about the outlook for growth amid China’s efforts to deal with the threat posed by Covid-19 and moves by central banks around the world to raise interest rates to dampen inflationary pressures.
The Brent crude price rose above $130/bbl in March after falling below $20/bbl in the early stages of the pandemic in 2020.
Oil firms can make plenty of money at current levels in areas such as the North Sea.
In an update Europa Oil & Gas said it is generating strong cash flows from the output from the Wressle oil field in Lincolnshire.
A spokesperson for the company said: “With a healthy balance sheet and ongoing production that generates profits, Europa is in a strong financial position to develop its existing assets and continues to seek opportunities to acquire further appraisal and early development assets.”
Europa bought into the Serenity find in the Moray Firth in April. A recent appraisal well produced disappointing results. However, Europa said yesterday that it was assessing the various development options to bring Serenity into production, with its partner in the licence i3 Energy.
The spokesperson for the company said Europa has not been deterred by the windfall tax on North Sea profits that was introduced in May.
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