Providence Resources P.l.c., (“Providence”) the London (AIM) and Dublin (ESM) quoted oil and gas exploration and production company, confirms an operational update for the Upper Jurassic Spanish Point gas condensate discovery which is located in Frontier Exploration Licence (FEL) 2/04. This licence, which also contains the Lower Cretaceous Burren oil discovery, is situated in the Main Porcupine Basin, c. 200 km off the west coast of Ireland in c. 400 metre water depth.
Under the terms of a 2008 farm-out agreement, Chrysaor elected to exercise its option (ref. RNS 14 March 2011) to drill up to two appraisal wells on the Spanish Point discovery. In return for committing to such a significant work programme, Chrysaor’s equity participation in FEL 2/04, and the adjacent FEL4/08, increased from 30% to 60%, with Providence and Sosina retaining 32% and 8%, respectively. As part of the agreement, Chrysaor provided a financial cap on Providence’s and Sosina’s financial exposure to the appraisal drilling costs.
Following a recent partnership meeting, the 2012 budget was unanimously approved. The budget includes the provision for well design activities as part of the ramp up to a 2013 appraisal drilling programme on the Spanish Point discovery. Currently, the plan is to spud the initial appraisal well in Q3 2013 subject to rig availability and governmental approvals. The partners also agreed to the transfer of Operatorship of FEL 2/04, FEL 4/08 and Licensing Option 11/2 from Providence to Chrysaor, subject to Irish government approval.
Commenting on this news, Tony O’Reilly, Chief Executive of Providence said,
“We are delighted to confirm that the pre-drill activities for the Spanish Point appraisal well have commenced and that a spud date has been scheduled. Next year should prove to be pivotal in assessing the exploration and development potential of hydrocarbons in the Porcupine Basin, with drilling now planned at Spanish Point, as well as at the Dunquin exploration prospect to the south.
Similar to our recent success at Barryroe, we believe that the application of modern well completion technologies, driven by the state of the art 3D seismic data can unlock material value at Spanish Point, a significant resource with up to 200 MMBOE REC potential. We welcome Chrysaor as new Operator offshore Ireland and we look forward to working with them as we finally return to Spanish Point to turn the drill bit after a 30 year absence.”
Press Release, July 20, 2012