Europa Oil & Gas (LON:EOG) has been awarded two licenses for underground coal gasification (UCG) off the east coast of England by the Coal Authority. The new licenses are adjacent to Europa’s existing East Midlands licenses.
With only 30% utilisation rate for the coals, the estimated potential UCG energy resource in the license areas stands at 6 billion barrels of oil equivalent.
Underground coal gasification (UCG) is a developing technology that recovers up to 80% of the calorific value of in situ coal by a process of controlled combustion. When combined with CO2 in the depleted coal seams, UCG creates a source of energy rivalling nuclear for low emissions and has lower unit costs than conventional gas fired stations, the group said, citing recent research.
One of the company’s key growth assets is the Voitinel gas field which is hosted on the EIII-1 Exploration Area of the Brodina Block in Romania. The company also has onshore oil producing assets in the UK - the Crosby Warren, Holmwood, West Firsby, Whisby-4 and PEDL150-Lincoln SW licenses. Europa has an interest in an area in the East Irish Sea, as well as interests in Poland, France and further afield in the Western Sahara region.
Shares in the company were up nearly 7% in midmorning trade.
Astaire Securities featured Europa Oil & Gas in its 'Morning Report' saying UCG has considerable potential to extract energy cleanly from the coal resources still present in the UK.
"With its existing operations in the East Midlands, Europa is well placed to pilot these technologies and the location of the licences provides easy access to the refinery, gas and energy infrastructure. Europa could already boast considerable diversity with production, appraisal and exploration assets in three European countries (UK, Romania and France) and this adds another string to its bow," the broker said.