Providence seeking funds for offshore Ireland drilling

Offshore staff

DUBLIN, Ireland Providence Resources has agreed to the terms for a conditional share placement designed to raise around $68.4 million.

The company plans to use the funds for three main purposes. One is to cover its share of payments arising from litigation with Transocean over a drilling program offshore Ireland.

Secondly, it needs capital to sustain costs associated with its portfolio of oil and gas projects and prospects offshore Ireland.

Thirdly, the company is looking to finance its share of drilling costs for a planned $46-million exploration well on the Druid prospect offshore western Ireland, subject to equipment availability, regulatory approvals, and joint venture partner funding.

Providence may also seek to deepen the proposed well into the underlying Drombeg exploration prospect, which would push the cost up to around $70 million. It estimates in-place prospective resources at 1.915 Bbbl.

To date the company has not succeeded in attracting farm-in partners to the Barryroe discovery in the Celtic Sea off southern Ireland, even though costs of a proposed single vertical appraisal well have come down to $25 million.

As for the Spanish Point gas/condensate discovery off the west coast, operator Cairn Energy did not achieve partner sanction for appraisal drilling in 2017 and has therefore requested an extension to the term of the surrounding license FEL 2/04 to allow drilling to be re-scheduled for a later date.

Following a review of its license portfolio Providence has relinquished its 3.2% stake in FEL 1/99 (Cuchulain) in the southern Porcupine basin; its 100% interest in prospecting license 1885 (Polaris) in the Rathlin basin offshore northern Ireland; and its 100% interest in prospecting license 1930 (Dragon UK) in the St. George’s Channel basin, offshore Wales.

In addition, a proposed multi-client survey that would have covered the Newgrange exploration prospect in FEL 6/14 will now not take place in 2017.

06/22/2016

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