Europa Oil & Gas (Holdings) plc has ended the royalty agreement over the Whisby 4 well in East Lincolnshire with operator and licence holder BritNRG.
UNCERTAINTIES
The company said the agreement had generated no income for it and that the North Kesteven project would need further investment for a potential cash return.
The carrying value of the agreement is written down to nil and on termination the associated liabilities written off.
Europa stands to gain net £185,000 which it will spend on its other assets.
Chief executive Will Holland added: “The Whisby 4 well was drilled in 2003 and since then it has been producing on natural decline to the point where the original net profits interest agreement is no longer profitable for Europa.
“Given the uncertainties associated with any further investment in the Whisby 4 well, the board decided that our capital is better spent on other projects that offer our shareholders a better value proposition.”
The company produces from three oil fields in the East Midlands including the 65% non-operated interest in W4 and 100% of West Firsby and Crosby Warren.
Essex-based BritNRG has three production and three exploration licences each for Whisby, Newton on Trent and Reepham, with the latter two shut in.