Europa Oil & Gas has won extra time for an oil exploration project in the UK's East Midlands that could hold shale gas.

Europa, which has operations off the coast of Ireland and onshore activities in France and the UK, said Britain's Department of Energy & Climate Change had extended its phase one PEDL 181 licence in east Lincolnshire for a year until June 2015.

It will allow Europa, which owns half of the licence, to drill the Kiln Lane-1 well there in the second half of 2014.

PEDL 181, which is close to licences that French oil giant Total has farmed into for shale gas drilling, may also hold shale gas, Europa added.

Chief Executive Hugh Mackay said: "The board considers the licence has good potential for conventional oil and gas and is also aware that the area may have potential as a shale gas resource."

Europa also has a 33% interest in drilling the Wressle prospect in the East Midlands Petroleum Province, where operator Egdon Resources expects to begin operations in the first three months of 2014.

Europa's shares closed 0.12p up at 6.25p in London.

PW

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Europa Oil & Gas (Holdings) (EOG) share price