Annual Financial Report

Results for the year ended 31 July 2009

Europa Oil & Gas (Holdings) plc (EOG) the AIM listed oil & gas exploration and
production group with assets in Europe and North Africa, today announces its
results for the 12 months ended 31 July 2009.

Operational highlights
  * Crude oil sales of 77,743 barrels, a decrease of 12% on 2008   
  * Drilled top hole section of Hykeham-1 well   
  * Proved a potential 40% production increase for West Firsby   
  * Reduced equity in Brates block to 20%   
  * Secured extension to West Darag licence to 31 December 2009
   
Financial highlights
  * Revenue of £2.9 million (2008: £4.4 million)
  * Profit before tax of £0.4 million (2008: £2.1 million)
  * Profit after tax from continuing operation of £0.1 million (2008: £0.4
    million)
  * Basic earnings per share from continuing operations 0.11 pence (2008: 0.71
    pence)
   
Post balance sheet events
  * Elected not to participate in any future Lilieci-1 development
  * Placed 12.5 million shares to raise £1.7 million
  * Drilled Voitinel-1. First test flowed gas at a rate of 1.6 mmscfpd
  * £1.6 million of available funding at 30 September 2009, post drilling of
    Voitinel
  * Rig contract executed with BDF for the main section of Hykeham-1
   
Chairman's statement

The Group's financial year spans a period of unprecedented turbulence in
commodity and equity markets, with Brent oil price falling from $120/bbl to
under $40/bbl during the twelve months. The fall in oil prices, albeit from an
unsustainable and artificial peak, adversely affected Europa's production
revenues which fell to £2.9 million from £4.4 million in 2008. The directors
reacted constructively to this situation by reducing their salaries by 20%
while the oil price was below $50/bbl. Despite this challenging business
environment, the Group has posted a pre-tax profit of £0.4 million (2008: £2.1
million).

The Group's production stream was also impacted by a fire at West Firsby, which
caused a shutdown of that site's production in June and July 2009, resulting in
an annual average production of 213 bopd (2008: 242 bopd). Experimental
production optimisation at West Firsby, conducted in May, confirmed the
potential for around 40% production increase at the site by upgrading the
facilities. Although delayed by the fire, a programme of work to increase
production at both West Firsby and Crosby Warren fields is now on-track to
deliver improvements by the end of 2009.

In the Aquitaine basin of SW France, the Group has reprocessed the existing
seismic data over most of the Béarn des Gaves and Tarbes Val d'Adour permits.
The forward programme is to develop a drilling location in conjunction with
possible new seismic acquisition in 2010.

Further afield, we successfully negotiated an extension of Phase 1 of the West
Darag concession in Egypt in order to undertake the acquisition of a new
seismic survey. The seismic survey is due to commence in October 2009 and a
decision will then be made regarding a commitment to enter Phase 2 on the
concession.

In early 2009, Europa participated in the drilling of the Lilieci-1 well Bacau,
Romania, which is currently suspended. The well was drilled as part of an
agreement with the Operator whereby our costs were carried and we had an option
to back-in to the well, after testing, on payment of the carried costs plus a
premium. Our assessment of the well tests was that there was insufficient gas
in place to warrant backing-in to any future development and the option was not
exercised. The results underlined the soundness of the decision to drill this
well at almost nil cost to Europa.

The high profile Voitinel well Brodina, Romania spudded on 21 August 2009 and
reached TD on 19 September 2009. The primary target of the prospect did not 
contain hydrocarbons, however the Brodina group decideded that the gas shows 
in a secondary target at a shallower depth warranted testing. The test is 
currently in progress. Initial results are promising, with the first test 
flowing at a rate of 1.6 mmscfpd.  The Operator will report when 
the tests are completed at the end of October.

Following the spudding of Voitinel-1 the directors took advantage of an
opportunity to raise equity funds. This resulted in net proceeds of £1.7
million. Directors and employees subscribed to 20% of the amount raised, with
only a 16.6% dilution to existing shareholders. This capital allows the Group
to quicken the pace on the production enhancement programmes, a process which
is already underway. It is anticipated that production will rise to over 350
bopd after completion of these programmes. At 30 September 2009 Europa had £1.6
million of available funding.

Attention now switches to the East Midlands again with the Hykeham-1
exploration well PEDL150, UK, a low risk drill offsetting our producing Whisby
oilfield. The well was spudded early in 2009 and drilled to 88m before being
suspended due to summer bird breeding season drilling restrictions. The
Hykeham-1 well targets 10mmbo in place and has all the essential elements for a
low risk oilfield prospect. We believe the well has a 1 in 3 chance of success.
We expect this well to be completed by January 2010 and if successful, could be
put on production immediately providing an indicative Group production level of
over 500 bopd.

Since June, oil prices have rallied and steadied in the $60-70/bbl range and
most economies have started to recover. This bodes well for a more stable and
predictable year ahead in terms of revenue stream. Combining this with
increased production, drilling in the UK, Romania and potentially France and
Egypt, make for a very exciting 2010.

Sir Michael Oliver
Chairman

Operational review

Licence Interests Table

Country  Project          Equity Operator Status                               
                                                                               
UK       Crosby Warren    100%   Europa   Production                           
         Oilfield                                                              
                                                                               
UK       West Firsby      100%   Europa   Production                           
         Oilfield                                                              
                                                                               
UK       Whisby Oilfield  65%    BPEL     Production                           
         (W4 only)                                                             
                                                                               
UK       PEDL143          40%    Europa   Exploration, Holmwood-1 well planned 
         (Holmwood)                       2010                                 
                                                                    
                                                                               
UK       PEDL150          75%    Europa   Exploration, Hykeham-1 well, West    
         (SW Lincoln)                     Whisby prospect                      
                                                                  
                                                                               
UK       PEDL180          50%    Europa   Exploration, Wressle prospect        
         (NE Lincs)                                                            
                                                                               
UK       PEDL181          50%    Europa   Exploration, Caister Horst prospect  
         (NE Lincs)                                                            
                                                                               
UK       PEDL222          50%    Valhalla Exploration, maturing prospects      
         (Torksey Area)                                                        
                                                                               
Romania  EIII-1 Brodina   28.75% Aurelian Exploration, Voitinel-1 on test      
                                                                               
Romania  EPI-3 Brates     20%    MND      Exploration, Barchiz-1 well and      
                                          Tazaul Mare prospect                 
                                                                               
Romania  EIII-3 Cuejdiu   17.5%  Aurelian Boistea-1 commercial feasibility     
                                          study                                
                                                                               
Romania  EIII-4 Bacau     19%    Aurelian Exploration, 4 year extension secured
                                                                               
France   Béarn des Gaves  100%   Europa   Exploration possible field           
                                          development                          
                                                                               
France   Tarbes val       100%   Europa   Field re-development, exploration    
         d'Adour                                                               
                                                                               
Poland   Blocks 434, 435, 2.5% * RWE-Dea  Appraisal drilling of Pola oil       
         454 and 455                      discovery to commence in late 2009   
                                                                               
Egypt    West Darag       60%    Europa   Exploration, seismic acquisition     
         Onshore                                                               
                                                                               
Western  Bir Lehlou       100%   Europa   Inactive - force majeure             
Sahara                                                                         
                                                                               
Western  Hagounia         100%   Europa   Inactive - force majeure             
Sahara                                                                         

* Overriding royalty interest


Summary

The Group holds interests in 18 licences (see table), with 15 in Europe and 3
in North Africa. The company strives to maintain a balanced portfolio and has,
on an unrisked reserves potential basis, 2% of the portfolio in production, 9%
in appraisal, 58% low risk exploration and 31% in high risk, high reward
exploration. We believe this balance allows the Group to use production to
build revenue through low risk drilling, and pay for high reward wells.

United Kingdom

Production/Development

Crosby Warren

Crosby Warren produces oil from the CW1 well, at about 45bopd. The CW2 well is
currently shut-in awaiting a workover. The field is undergoing a production
enhancement programme which includes a larger pump on CW1 and a proppant frac
stimulation on CW2, a technique which was used to great effect on CW1. These
are scheduled to complete during the fourth quarter of 2009.

West Firsby

In May, a series of engineering studies proved that the West Firsby Oilfield
had been underperforming and production could be increased by over 40% from its
average production of 120 bopd. An upgrade of the facilities will be required
to maximize and sustain this production increase and ensure production
reliability. In September, OSL Consulting Limited were engaged to design these
modifications. Work has already begun and is scheduled to complete in 16 weeks.

On the morning of 22 June 2009, a fire caused damage to two engines and pumps.
The emergency shutdown system activated and damage was contained within the
engine bund. There were no injuries, no spill of oil, and the equipment was
fully insured. Production was quickly restored from the WF7 well and at the
time of writing, production from the field was averaging 80 bopd. Work
continues to bring both wells back to full production.

The field is being remapped with the aim of determining infill drilling
locations. This work is expected to be completed before the end of October.
Planning permission has already been obtained for a new well at West Firsby and
once a location is determined, this well can be drilled relatively quickly and
cheaply.

Whisby

Production continues along a well-defined decline curve for the W4 well. At the
end of the reporting period, the well was producing 90 bopd (58 bopd net to
Europa) with a cumulative production of approximately 350,000 bbls. No
additional work is planned on the well.

Exploration

The UK onshore has several petroleum basins and our exploration efforts over
the past year have concentrated on the East Midlands Petroleum Basin and the
Weald Basin in Southern England. The East Midlands has a long history of oil
and gas production from the Carboniferous and currently produces mainly oil,
with rates of up to 2,500 bopd. The Weald Basin produces both gas and oil from
Jurassic reservoirs.

PEDL150 (75%) - Hykeham & West Whisby Prospects (East Midlands Petroleum Basin)

The Hykeham prospect received planning consent for drilling in 2008. A
moratorium during the bird breeding season at the adjacent Whisby Nature Park
means that the well cannot be drilled between the beginning of March and the
end of August. For this reason, it was cost effective to spud the well in
January 2009 and drill to a depth of 88m before setting surface casing and
suspending until the end of the bird breeding season. Europa has signed a
contract with British Drilling and Freezing Limited (BDF) for their Rig 28 to
drill the main section of Hykeham-1 and it is anticipated that drilling will
commence in late 2009 after the rig's current campaign.

Hykeham is a well-defined prospect with clear four-way dip closure and a common
spillpoint with the Whisby Oilfield, 1.5km to the northwest. The nearby
Caledonian Farm well encountered good oil shows in a 10m thick channel
sandstone reservoir, significantly thicker than that seen in the Whisby
Oilfield. The well is targeting 10 million barrels of oil in place and is given
an in-house risk assessment of better than a 1 in 3 chance of success.

We are excited about drilling this well and regard it as having a good chance
of containing commercial hydrocarbons with an estimated 2.4 million barrels of
potential recoverable oil. If successful, this well will more than double our
reserves and can immediately be in production and generate revenue.

In April 2009 Europa received planning permission to drill an exploration well
at West Whisby on the same licence. The West Whisby Prospect has an estimated
2.5 mmbo of most likely prospective reserves.

PEDL180 and PEDL181 (50%) (East Midlands Petroleum Basin)

These two licences cover an area of some 600km2 of the Humber Basin. On this
acreage the Wressle prospect, only 7 km from Crosby Warren, is the most-likely
low-risk first drill target. In addition, reprocessing of the Immingham 3D
seismic survey is underway and there is a strong possibility that the Caister
Horst lead, identified for the licence application, will develop into a
Saltfleetby Field 'lookalike' (the largest onshore gasfield, with over 73bcf of
2P reserves) and therefore mature into a 'must-drill' prospect.

Management believes that the acquisition of this large prospective area stole a
march on the competition and will create a flow of high quality drillable
prospects over the coming years.

PEDL222 (50%) (East Midlands Petroleum Basin)

This is primarily protection acreage, connecting the three disparate parts of
PEDL150, but also covering the Torksey Field, a subcommercial discovery with
potential stratigraphic upside. Work continues on the block, operated by
Valhalla.

PEDL143 (40%) - Holmwood Prospect (Weald Basin)

Following a lengthy process of environmental and planning management a planning
application was lodged with Surrey County Council in January 2009. In April,
the Council requested further information in order for the planning department
to submit their recommendation to the committee. A planning decision is
expected in late 2009.

There has been some local objection to this application due to its location in
an Area of Outstanding Beauty in the Surrey Hills. While understandable, we
believe the objections are unjustified. Enormous effort has been made to ensure
that the location will not be adversely affected by this temporary development
in a secluded, working, Forestry Commission conifer plantation site. Extensive
ecological, archeological, noise, light and traffic assessments have been
commissioned and these have not revealed any specific causes for concern over
the proposed drilling.

P1545 (50%) - East Irish Sea blocks 109/5 and 112/30 (UK Offshore)

The existing 2D seismic database was reprocessed and amplitude variations with
offset (AVO) work undertaken to attempt to de-risk the presence of gas in the
large structural closure. Amplitude anomalies in the anticipated reservoir
sequence did not result in an AVO anomaly. Following this result, it was
decided to allow the licence to lapse in 2009 without entering into a drilling
commitment.

Romania

EIII-4 Bacau Concession (19%) - Lilieci Discovery

Lilieci-1 reached a total depth of 2,958m in December 2008 encountering a
number of gas-bearing sands. Three zones were tested at an aggregate flowrate
of 4.6mmscfpd (800 boepd) in February. The Bacau group undertook a further test
of extended duration in April-May 2009. The test flowed gas at 2mmscfpd, but
demonstrated linear pressure decline during the flow periods. Our assessment is
that the well is in contact with a limited volume of gas.

The well was drilled as part of an agreement with the operator whereby Europa's
costs were carried and we had an option to back-in to the well after testing,
on payment of the carried costs plus a premium. Following the results of the
extended test, we elected not to participate in any development of the
discovery on commercial grounds.

The consequence of this is that Europa foregoes its 19% working interest in the
Lilieci discovery but retains its interest in the remainder of the block,
covering some 1,250km2 and including oil plays in the thrust belt in the
western part of the licence. This area remains under explored and is likely to
benefit from further seismic investigation in 2010.

Work continues on maturing the prospectivity of the Bacau licence. A four-year
extension has been secured which will allow work to progress on developing
prospects in the western, thrustbelt, area of the block. In addition, it is
expected that partner Romgaz will acquire seismic in late 2009 over the
southern part of the licence.

EIII-1 Brodina Concession (28.75%) - Voitinel Prospect

The high potential Voitinel Prospect was spudded in August 2009. The well
targeted the sub-thrust Badenian sandstones which produce in the Lopushnya
Field to the north. Disappointingly, the primary target sandstones were dry.
Several shallower sandstones had gas shows and the deepest of these flowed 
on test at a rate of 1.6 mmscfpd with a flowing pressure of 55 bar.  The 
forward plan is to perforate additional zones and undertake multi-rate tests 
during late October and we will report the full results in due course.

The Voitinel-1 well was scheduled to take 52 days to reach total depth (TD) but
actually reached TD in under 30 days. The savings achieved have allowed the
Group to bring forward the UK production enhancement programmes.

EPI-3 Brates Concession (20%) - Barchiz and Deep Tazlaul Mare Prospectivity

Equity interest in the concession was previously split differently between
Eastern and Western parts. During the year Europa agreed to reduce overall
interest in the combined Brates block to 20%.

Specialised seismic processing of seismic data acquired in 2008 over the
complex thrust belt area has demonstrated some remarkable improvement in
imaging, notably in the Tazlaul Mare area. Structural modeling has postulated
that a thrusted sequence of prospective Oligocene sediments must underpin the
Tazlaul Mare structure, where a gas condensate field has been developed in the
shallower section. On conventional seismic data, it is not possible to see any
of the detailed structure of the deep Tazlaul Mare area, but trials of the new
processing clearly demonstrates highly promising structural rollover with size
in the 50-100mmbo prospective resources range. Further lines will be processed
using this technique in order to mature this lead for drilling.

Elsewhere on the concession, the Barchiz Prospect, situated on the same
structural trend as the 50mmbo Geamana Oilfield, is anticipated to be drilled
in 2010.

EIII-3 Cuejdiu Concession (17.5%) - Boistea Gas Discovery

The Boistea-1 well tested gas at modest rates from Sarmatian sands after
suffering formation damage during testing. It is clear from the flow rates at
Lilieci-1, where reservoir quality and pressure are similar, that un-damaged
formation at Boistea should flow at significantly higher rates than the
original test. It is therefore possible that a reservoir frac treatment,
coupled with a long-term test, could generate a viable commercial development
for Boistea.

France

Europa holds two licences in the Aquitaine Basin.

Tarbes Val d'Adour (100%)

In Tarbes Val d'Adour, effort is focused on the potential re-development of the
Osmets Oilfield. This field was shut-in by Total during a time of very low oil
price in the mid 80's. Europa has reprocessed a large amount of seismic,
including 600km of 2D data in the vicinity of the Osmets play and is working
with BRGM, the French Geological Survey, to undertake a regional geological
study. With the early production data now received from Total, Europa intends
to re-interpret the area with the expertise of BRGM, with the aim of finding a
suitable well location in 2010 to re-develop the Osmets Oilfield.

Béarn des Gaves (100%)

In the Béarn des Gaves permit, there are a number of wells that have showed
gas, including the deep Berenx-1 well, which encountered high pressure gas in
the same reservoir as the 5TCF Lacq gasfield. In the western part of the
licence, several shallow wells drilled in the early part of the 20th century
flowed oil and gas. This western part of the licence is therefore the primary
focus for exploration.

Poland

An early stage investment for Europa was in the North Carpathian area of
Poland, home to a number of oil and gas fields in similar settings to the
Company's Romanian acreage. As a result of this initial working interest in
Blocks 434, 435, 454 and 455 in southern Poland, Europa acquired a 2.5%
overriding royalty interest in any oil and gas production.

The current operator RWE Dea, the E&P arm of the German utility, has recently
drilled several wells in the licence areas and plans to drill a number of
appraisal wells to the Pola-1 oil discovery starting in November 2009. In
advance of any production from these Blocks, the Company is in the process of
clarifying the legal status of the royalty.

Egypt

Europa, along with its partner Solaris Energy plc, has identified several
structural leads each with reserves potential of 15 - 35mmbo recoverable in the
Sukhna area of the concession. Sukhna is a coastal plain where the Gulf of Suez
(GOS) rift comes onshore and its proven petroleum system is indicated to extend
into the area of these mapped leads. The GOS, despite its small overall size,
is an extraordinarily prolific petroleum system, having produced over 5 billion
barrels to date.

Although Europa has made significant progress with the existing seismic data,
we have been unable to reprocess as planned due to degradation of the original
tape records. We have therefore decided to progress directly to seismic
acquisition with the objective of firming up drillable targets. The cost of the
survey, detailed in the winning tender, will for the most part be covered by
the existing letter of guarantee that Europa provided in favour of Egyptian
General Petroleum Corporation (EGPC).

In June EGPC granted Europa a six month extension on the first phase of the
West Darag concession in order to permit the acquisition of approximately 350km
of 2D seismic data prior to making the decision to enter into Phase 2. The
preferred contractor for this new seismic acquisition has indicated its
availability to undertake the survey starting in October.

Western Sahara

Europa holds two large exploration permits, Bir Lehlou and Hagounia in Western
Sahara licensed by the Saharawi Arab Democratic Republic. Due to the ongoing
dispute over sovereignty between the indigenous Saharawi people and the
Moroccan state, the licences are effectively in force majeure until such time
as a resolution is reached.

Bir Lehlou (100%)

The Bir Lehlou permit is located in southwest of the Tindouf Basin. This is a
sub-set of the large Palaeozoic basin which once covered North Africa and
shares a common history with the Sirte and Murzuq Basins in Libya, along with
the Ghadammes and Reggane Basins in Algeria. While these analogous basins have
world-class volumes of proven hydrocarbons, the Tindouf is almost totally
unexplored. This is primarily a function of it remote location and the fact
that the basin is thought to be over mature for oil but remains gas bearing in
the southern portion, where the Bir Lehlou permit is located. The basin is
estimated to contain over 8000 metres of sediment and if found to be
hydrocarbon bearing could be equally as prolific as the Libyian and Algerian
Basins.

Hagounia (100%)

The Hagounia permit lies in the El Aaiun Basin in the coastal region of Western
Sahara in a setting similar to other West African coastal margin basins, such
as Mauritania. The basin formed as an extensional rift system during the Late
Triassic to Lower Jurassic, followed by subsidence and renewed rifting during
the Cretaceous period. Source rocks which were deposited in the basin during the
Jurassic are now mature for oil and overlain by Cretaceous clastics and further
organic-rich marine shales. Triassic age organic-rich shales may also provide a
second deeper petroleum system.

Although there has been little exploration in the El Aaiun, gas shows have been
recorded in Triassic through Tertiary age sediments. Oil shows were present in
one well in Jurassic age sediments and the Cap Juby Field, which lies on trend
in Morocco, produced heavy oil on test at a rate of 2,400 bopd from Jurassic
carbonates.

Ukraine

A letter of intent was signed between the company and a Swedish-listed oil and
gas company in anticipation of an outright sale of the Ukraine assets. Progress
has been slow due to the legal process in Ukraine but we move towards
completion.

Paul Barrett
Managing Director

Financial review

Results for the year

Group revenue for the year was £2,936,000 (2008: £4,418,000).

UK oil revenues during the year ended 31 July 2009 were 77,743 barrels or 213
bopd (2008: 88,710 barrels or 242 bopd). Crosby Warren production was down by
7,931 barrels or 22 bopd due to technical problems with the CW2 well.
Approximately 2,000 barrels of West Firsby production was delayed as a result
of reduced production following the fire on 22 June 2009.

The selling price for Europa's UK production is contracted at a small discount
to Brent crude price. Average price achieved in the year to 31 July 2009 was
$62.30 per barrel (2008: $99.45).

A stronger US Dollar in the year to 31 July 2009 meant that some of the reduced
Dollar revenue was recovered as the sales were translated to Sterling at an
average rate of $1.6533 (2008: $2.0050).

The Crosby Warren field sells a very small quantity of gas to the nearby Corus
steelworks.

Cost of sales increased due to site maintenance and higher chemicals costs. For
the calculation of the depletion charge included in cost of sales, the Group
adopted the findings of the reserves report issued by Energy Resource
Consultants Limited dated 23 November 2008. The intangible asset associated
with the East Irish Sea exploration was written off in the year. Administrative
expenses increased as a result of a charge in respect of stock options granted
to two directors in the previous year.

Finance income and finance costs were both affected by exchange fluctuations.
The cost of an out-of-the-money interest rate swap with current fair value of £
40,000 was recognised.

The results for 2009 show a profit before taxation of £423,000 (2008: £
2,054,000).

Taxation

The total tax charge (current and deferred) for the year was £356,000 (2008: £
1,609,000). All of the charge relates to UK activities where the 20%
Supplemental Charge applies to producing fields. The Field Allowance incentive
announced by HMRC in April 2009, will exempt future UK onshore discoveries from
the Supplemental Charge.

Profit after tax

The results for 2009 show a profit from continuing activities after taxation of
£67,000 (2008: £445,000).

Discontinued operations

As announced in 2008, Europa has entered into discussions with a Swedish oil
and gas company to divest the Group's remaining assets in Ukraine. The assets
were substantially written down in 2007 and are presented as a discontinued
activity, with a full provision.

Cashflow

Net cash inflow from operating activities was £1,411,000 (2008: £2,942,000).
Net cash used in investing activities was £1,121,000 (2008: £4,058,000). The
net overdraft at the end of the year was £292,000 (2008: £1,019,000).

Financial risk

Europa's activities are subject to a range of financial risks including
commodity prices, liquidity within the business and of counterparties, exchange
rates and loss of operational equipment or wells. These risks are managed
through ongoing review taking into account the operational, business and
economic circumstances at that time.

Commodity price and currency

The Board has considered the use of financial instruments to hedge oil price
and US Dollar exchange rate movements. To date, the Board has not hedged
against price or exchange movements, but intends to regularly review this
policy.

Sales revenue is generated primarily in US Dollars and these funds are matched
where possible against expenditures within the business. However, most capital
and operating expenditures are Euro and Sterling denominated which results in a
currency exposure. US Dollar receipts have been used to purchase Euros and
Sterling.

Liquidity

Detailed cash forecasts are prepared frequently and reviewed by management and
the Board.

The Group's production provides a monthly inflow of cash and is the main source
of working capital and project finance. Additional cash is available from a £1
million multi option facility and a £1 million term loan provided by Europa's
bankers. The principal interest rate risk for the Group is the interest charge
arising from utilisation of this facility.

On 12 March 2008, with the bank facility fully utilised, short term funding was
provided by the Sherborne Trust, a discretionary trust of which C W
Ahlefeldt-Laurvig was a beneficiary. The Trust provided a £512,000 loan. On 2
April 2008 this loan was assigned to C W and Mrs M Ahlefeldt-Laurvig. The loan,
plus £25,000 of accrued interest, was outstanding at 31 July 2008 but fully
repaid in August 2008.

On 1 December 2008 the share finance facility with Headstart terminated. Since
the facility was put in place on 1 June 2006 three draw downs were made for a
total £300,000 in exchange for the issue of new ordinary shares. On 31 May
2009, 300,000 warrants which were issued to the Headstart Group of Funds as
part of the above financing arrangement expired.

Exploration, drilling and operational risk

The business of exploration and production of oil and gas involves a high
degree of risk. Few properties that are explored are ultimately developed into
producing oil and gas fields.

Significant expenditure is required to establish the extent of oil and gas
reserves through seismic surveys and drilling and there can be no certainty
that oil and gas reserves will be found. The exploration and development of oil
and gas assets may be curtailed, delayed or cancelled by unusual or unexpected
geological formation pressures, oceanographic conditions, hazardous weather
conditions or other factors.

There are numerous risks inherent in drilling and operating wells, many of
which are beyond the company's control. The Group's operations may be
curtailed, delayed or cancelled as a result of environmental hazards,
industrial accidents, occupational and health hazards, technical failures,
shortage or delays in the delivery of rigs and/or other equipment, labour
disputes and compliance with governmental requirements.

Drilling may involve unprofitable efforts, not only with respect to dry wells,
but also to wells which, though yielding some oil or gas, are not sufficiently
productive to justify commercial development. Completion of a well does not
assure a profit on the investment or recovery of drilling, completion and
operating costs.

Appropriate insurance cover is obtained annually for all of Europa's
exploration, development and production activities.

Accounting policies

The Group has not made any material changes to its accounting policies in the
year to 31 July 2009

Phil Greenhalgh
Finance Director

Consolidated income statement for the year ended 31 July 2009

                                                           2009      2008                    
                                                           £000      £000
Continuing operations
Revenue                                                   2,936     4,418
Other cost of sales                                      (1,694)   (1,548)
Exploration write-off                                      (297)       (1)
Total cost of sales                                      (1,991)   (1,549)
                                                        --------  --------
Gross profit                                                945     2,869
                            
Administrative expenses                                    (498)     (376)
Finance income                                              224        12
Finance costs                                              (248)     (451)
                                                        --------  --------
Profit before taxation                                      423     2,054
Taxation                                                   (356)   (1,609)
                                                        --------  --------
Profit for the year from continuing operations               67       445
                                                        --------  --------

Discontinued operations
Loss for the year from discontinued operations              (47)     (296)
                                                        --------  --------
Profit for the year attributable to
the equity shareholders of the parent                        20       149
                                                        ========  ========
     

                                                           2009      2008
                                                          Pence     Pence
Earnings / (loss) per share (eps)                     per share per share
Basic eps from continuing operations                      0.11p     0.71p
Basic eps from discontinued operations                  (0.08)p   (0.47)p
Basic eps from continuing and discontinued operations     0.03p     0.24p
Diluted eps from continuing operations                    0.11p     0.70p
Diluted eps from discontinued operations                (0.08)p   (0.47)p
Diluted eps from continuing and discontinued operations   0.03p     0.24p


Consolidated balance sheet as at 31 July 2009
                                                           2009      2008
                                                           £000      £000
Assets

Non-current assets
Intangible assets                                         7,473     7,241
Property, plant and equipment                             5,554     5,996
                                                        --------  --------
Total non-current assets                                 13,027    13,237
                                                        --------  --------

Current Assets
Inventories                                                  15        16
Trade and other receivables                                 469       656
Cash and cash equivalents                                     4         3
                                                        --------  --------
Total current assets                                        488       675
                                                        --------  --------
Total assets                                             13,515    13,912
                                                        ========  ========

Liabilities

Current liabilities
Trade and other payables                                   (900)   (1,752)
Current tax liabilities                                    (588)     (380)
Fair value through profit or loss                           (40)        -
Short-term borrowings                                      (767)   (1,548)
                                                        --------  --------
Total current liabilities                                (2,295)   (3,680)
                                                        --------  --------

Non-current liabilities
Long-term borrowings                                       (772)     (302)
Deferred tax liabilities                                 (2,651)   (2,701)
Long-term provisions                                     (1,137)   (1,058)
                                                        --------  --------
Total non-current liabilities                            (4,560)   (4,061)
                                                        --------  --------
Total liabilities                                        (6,855)   (7,741)
                                                        --------  --------
Net assets                                                6,660     6,171
                                                        ========  ========
                                                                                                                    
Capital and reserves attributable
to equity holders of the parent

Share capital                                               626       626
Share premium account                                     4,692     4,692
Merger reserve                                            2,868     2,868
Forex reserve                                               352       (21)
Retained earnings                                        (1,878)   (1,994)
                                                        --------  --------
Total equity                                              6,660     6,171
                                                        ========  ========

Consolidated statement of changes in equity for the year ended 31 July 2009
Attributable to the equity holders of the parent

                                 Share    Share   Merger    Forex Retained    Total
                                capital premium  reserve  reserve earnings   equity
                                  £000     £000     £000     £000     £000     £000
Balance at 1 August 2007           620    4,597    2,868        5   (2,140)   5,950
Exchange difference on translation 
of foreign operations                -        -        -      (26)       -      (26)
Profit for the year                  -        -        -        -      149      149
                                -------  -------  -------  -------  -------  -------
Total recognised income
and expense for the year             -        -        -      (26)     149      123

Share based payment                  -        -        -        -       (3)      (3)
Issue of share capital               6       95        -        -        -      101
                                -------  -------  -------  -------  -------  -------
Balance at 31 July 2008            626    4,692    2,868      (21)  (1,994)   6,171
                                =======  =======  =======  =======  =======  =======

Balance at 1 August 2008           626    4,692    2,868      (21)  (1,994)   6,171
Exchange difference on translation
of foreign operations                -        -        -      373        -      373
Profit for the year                  -        -        -        -       20       20
                                -------  -------  -------  -------  -------  -------
Total recognised income
and expense for the year             -        -        -      373       20      393
Share based payment                  -        -        -        -       96       96
                                -------  -------  -------  -------  -------  -------
Balance at 31 July 2009            626    4,692    2,868      352   (1,878)   6,660
                                =======  =======  =======  =======  =======  =======


Consolidated cash flow statement for the year ended 31 July 2009

                                                           2009      2008
                                                           £000      £000
Cash flows from operating activities

Profit after taxation from continuing operations             67       445

Adjustments for:
Share based payments                                         96        (3)
Depreciation                                                576       590
Exploration write-off                                       297         1
Loss on sale of non-current assets                            -         2
Finance income                                             (224)      (12)
Finance expense                                             248       451
Taxation expense                                            356     1,609
Decrease in trade and other receivables                     187       351
Decrease in inventories                                       1        20
Increase / (decrease) in trade and other payables            34      (190)
                                                        --------  --------
Cash generated from continuing operations                 1,638     3,264

Loss after taxation from discontinued operations            (47)     (296)

Adjustment for:
Depreciation including exploration and write offs             -       296
                                                        --------  --------
Cash used in discontinued operations                        (47)        -

Income taxes paid                                          (180)     (322)
                                                        --------  --------
Net cash from operating activities                        1,411     2,942
                                                        --------  --------

Cash flows used in investing activities
Purchase of property, plant and equipment                  (191)   (1,438)
Purchase of intangible assets                              (930)   (3,655)
Proceeds from sale of property, plant and equipment           -        23
Proceeds from sale of discontinued operations                 -     1,000
Interest received                                             -        12
                                                        --------  --------
Net cash used in investing activities                    (1,121)   (4,058)
                                                        --------  --------

Cash flows from financing activities
Proceeds from issue of share capital                          -       100
Underwriting fee                                              -        (5)
Proceeds from long-term borrowings                        1,000       496
Repayment of borrowings                                    (585)     (452)
Interest paid                                              (138)     (144)
                                                        --------  --------
Net cash from / (used in) financing activities              277        (5)
                                                        --------  --------

Net increase /(decrease) in cash and cash equivalents       567    (1,121)
Exchange gain / (loss) on cash and cash equivalents         160       (47)
Cash and cash equivalents at beginning of year           (1,019)      149
                                                        --------  --------
Cash and cash equivalents at end of year                   (292)   (1,019)
                                                        ========  ========

Notes

 1. The financial information here presented is extracted from the audited 
    accounts of the Group for the 12 months to 31 July 2009.
   
 2. Basic earnings per share is calculated based on an average number of shares
    in issue of 62,563,730 (2008: 62,401,492).
   
 3. Diluted earnings per share includes the effect of stock options and uses an
    average number of shares of 62,563,730 (2008: 63,180,482).

 4. The accounts were approved by the Board on 19 October 2009. They will be 
    posted to shareholders next week and available on the company
    website www.europaoil.com later today.