Providence completes Irish license farm-out

Irish oil and gas exploration company Providence Resources has received consent from the Minister of Communications, Climate Action, and Environment for the transfer of 30 percent equity in FEL 2/14 off Ireland to Capricorn.

Providence said on Monday that the consent followed the March farm-in by Capricorn, a subsidiary of Cairn Energy, where Capricorn will partner in the upcoming Druid and Drombeg 53/6-A well, scheduled for late June.

The approval by the Minister of Communications, Climate Action, and Environment means that the farm-in deal is now closed.

According to terms of the deal, Capricorn now has a 30 percent working interest in FEL 2/14 and will pay 45 percent of the drilling costs for the 53/6-A well, subject to a gross well cap of $42 million.

Also, Providence will receive a cash payment of $2.82 million, which is equal to 30 percent of the total sunk costs of $9.4 million incurred through June 30, 2016, by the company and its license partner Sosina. The cash payment will be paid on a pro rata basis.

As a result of this transaction, Providence remains the operator with a 56 percent interest, Capricorn now has 30 percent, and Sosina holds the remaining 14 percent interest.

To remind, Providence has already contracted the Stena IceMAX drillship for the drilling of the 53/6-A, subject to all regulatory consents. The drilling contract for the drillship provides for one firm well, plus an additional option for the drilling of a second follow-on well. The operational rate agreed for the rig is $185,000 per day.

Offshore Energy Today Staff

Share this article

Follow Offshore Energy Today

Events>

<< Jul 2019 >>
MTWTFSS
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31 1 2 3 4

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply