On Wednesday, it was announced that Shell was exiting Corrib through a deal with the Canada Pension Plan Investment Board (CPPIB), which is paying an initial US$97mln upfront for the stake in the field, equivalent to 27,000 barrels oil equivalent production per day.
Europa has built a portfolio of exploration assets off Ireland’s west coast and, significantly, this includes acreage immediately next-door to the Corrib field. Here, the explorer could potentially find new gas resources that would possibly feed into the Corrib infrastructure.
Any potential future success in this regard is boosted by Shell’s exit from Corrib, according to finnCap analyst Dougie Youngson, who in a note explained that the major oil firm had no plans to expand what is a strategic asset for the Republic of Ireland.
Europa may be positioned to expand Corrib lifespan
“This is very exciting news for Europa. RD Shell had no interest in doing any further work on Corrib, one can assume that this will not be the case for the new Canadian partners,” the analyst said.
“Corrib will require back fill gas in order to prolong its life and Europa is in the ideal position to provide it if exploration is funded and successful.”
At present, Europa is analysing technical data (existing or ‘legacy’ seismic data) as it assesses the area’s exploration potential and, more broadly, the company is advancing farm-out processes to bring in partners to its Irish projects.
Exploration partners sought for Irish ventures
Earlier this year, Europa agreed its first Irish farm-out deal with Cairn Energy joining the company in a separate exploration venture in the Porcupine basin, in the Atlantic margin.
Cairn at the same time partnered with another AIM-quoted explorer, Providence Resources PLC (LON:PVR) for a separate exploration venture off the west coast. Here, drilling just kicked off this week with the partners targeting some 5 bn barrels of oil potential across the two targets.
This well, the Druid-Drombeg exploration well, is expected to be the first in a number of new drilling projects in the wake of Ireland’s successful 2016 licensing round – which saw majors like Exxon Mobile (NYSE:XOM), BP PLC (LON:BP), China’s CNOOC (NYSE:CEO) and Statoil (NYSE:STO) pick up new projects.
New drilling a catalyst for all Irish explorers
Providence, Cairn and Sosina are all partners in the Druid-Drombeg well - and, significantly, Total has an option to acquire 35% when the results come in – where drilling started earlier this week.
The Stena IceMAX deep-water drillship is contracted for the programme, and operations have now begun after the Minister of Communications, Climate Action and Environment gave consent on July 11.
Providence on Wednesday told investors that a further update will be provided once the Druid prospect has been penetrated, or as appropriate, drilling is then planned to continue down to the underlying Drombeg prospect.
Europa boss Hugh Mackay sees the new drill programme as a potential catalyst for all explorers in Ireland’s Atlantic Margin, not just those staked directly in Druid-Drombeg.
“We were pleased to note that Providence Resources has begun drilling operations on the Druid and Drombeg prospects in the South Porcupine Basin offshore Ireland,” Mackay said on Thursday.
“With the recent arrival of a number of major operators to the region, we believe this well will be the first of many to be drilled over the next few years.
“Success at this or any other well in Atlantic Ireland will have positive read across for our industry-leading portfolio of licences offshore Ireland where we have already identified 32 prospects and leads in a diverse range of six play types and three basins across all seven of our licences.”