Europa Oil & Gas announced an extension to the sale and purchase agreement (SPA) signed between its wholly owned subsidiary and Upland Resources (UK Onshore) in relation to a 10% interest in Europa’s PEDL180 and PEDL182 (‘the Licences’) in North Lincolnshire.
Europa currently has a 30% working interest in the Licences, which include the Wressle discovery and the Broughton North prospect, alongside Egdon Resources (operator, 25%), Celtique Energie Petroleum Ltd (33.33%), and Union Jack Oil (11.67%), (together “the Joint Venture partners”). Completion of the SPA would result in Europa retaining a 20% interest in the Licences.
As set out in the Company’s announcement of 24 November 2016, completion of the SPA is conditional upon, inter alia, approval from the Oil & Gas Authority and approval of the Wressle Field Development Plan. On 7 February 2017, the Company announced the decision by the Joint Venture partners to appeal against the refusal by North Lincolnshire Council to grant planning consent for the development of Wressle and to file a new planning application which will include more detailed information covering the specific concerns outlined by the Council’s planning committee.
To allow sufficient time for the appeal and application processes to be completed, Upland has agreed to an extension of the 'long stop' date by which the conditions of the SPA are to be satisfied to 30 September 2017. The previous ‘long stop’ date had been fixed at 31 March 2017.
On satisfaction of the conditions, the sale to Upland of a 10% interest in the Licences is to be effected by way of an assignment from Europa. As part of the consideration due to Europa on completion of the SPA, the Company is to be issued with 23,076,923 new ordinary shares in Upland (‘the Initial Consideration Shares’). The remainder of the initial consideration is to be settled in cash.
Following the extension of the ‘long stop’ date to 1 September 2017, Europa has agreed not to dispose of any of the Initial Consideration Shares before 1 September 2018. This is subject to certain limited exceptions.