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LONDON (Alliance News) - Providence Resources PLC Thursday said it is continuing discussions with potential partners on the Barryroe oilfield offshore Ireland and contemplating how to best conduct future drilling operations on the site.
Providence holds an 80% stake and operates the offshore field, with fellow London-listed firm Lansdowne Oil & Gas PLC holding the other 20%. Lansdowne noted the announcement made by Providence in its own statement.
Providence said it is still holding talks with third parties about bringing in another partner to the asset, and said it is also considering a proposal from an alliance of its contractors about implementing a "risk-sharing model" to the future drilling programme.
The alliance of contractors is made up of a "major rig operator" and a drilling & well management firm. The latest estimate for the drilling of an appraisal well on the asset is GBP16.0 million, said Providence.
Providence said evaluation of the C-sand reservoir has confirmed "significant productivity and resource potential" across the eastern portion of the SEL 1/11 licence and the southern portion of the adjacent OPL1 licence.
The reservoir has been tested and has suggested production rates from the 48/24-10z well could reach up to 30.0 million standard cubic feet a day, with an estimated gas-in-place of 400.00 billion standard cubic feet.
Providence also said that discussions have commenced and technical evaluation is ongoing regarding potential development synergies with owners of existing gas production infrastructure.
Providence also provided an update on the Helvick oil discovery offshore Ireland, which is owned 72.5% by Providence and 9% by Lansdowne.
Providence said it has been granted an extension to the lease until March 2018 to allow further evaluation to be conducted aimed at figuring out a low cost development plan for the prospect.
That lease extension has triggered a staged 50% farm-in to the discovery by Marginal Field Development Co Ltd, formerly ABT Oil & Gas, which will acquire staged interests in the discovery through funding phases of an agreed work programme. That deal has already been announced.
Marginal will get a 10% stake in Helvick once authorities have given their approval, and the other 40% will be assigned to Marginal once an agreed work programme has been agreed and completed. Lansdowne did have a 10% stake in the discovery but that fell to 9% due to the initial 10% award to Marginal.
If Marginal completes all the farm in work to acquire the full 50% stake in Helvick, then Providence would have a 31.2% stake and Lansdowne stake would drop to 5%.
Fellow London-listed Seaenergy PLC released its own statement noting the update, as it holds a 18.67% stake in Lansdowne Oil at a corporate level.
Providence shares were up 11% to 12.50 pence per share on Thursday whilst Lansdowne shares were up 2% to 1.53p. Seaenergy shares were trading up 1.6% to 3.56p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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