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Providence Resources and Lansdowne Oil & Gas closer to Barryroe farm-out with signing of exclusivity deal

The two AIM-quoted explorers intend to drill again at Barryroe in 2018, and landing a long-awaited new partnership would be a significant boon to their plans
oil and gas operations
Drilling at Barryroe is slated for 2018

Providence Resources PLC (LON:PVR) and Lansdowne Oil & Gas Plc (LON:LOGP) are now closer to sealing a farm-out deal for the Barryroe field, in the Celtic Sea offshore Ireland, with the signing of an exclusivity agreement with a potential partner.

Lansdowne shares jumped 40% in Thursday’s early transactions, while Providence shares gained 7.87%.

READ: Providence Resources gets consent to transfer Celtic Sea interests

The two AIM-quoted explorers intend to drill again at Barryroe in 2018, and landing a long-awaited new partnership would be a significant boon to those plans.

“The company has continued to engage with interested co-venture partners and earlier this month, having reached provisional agreement on key commercial terms with a potential farminee, we have granted a period of exclusivity to them in order to conclude contractual negotiations which, if successful, would deliver a multi-well programme at Barryroe,” said Tony O’Reilly, Providence chief executive.

“However, given its conditional nature and subjectivity to final contracts, no specific commercial details are being released at this time. 

“Shareholders should note that there is no certainty that this farm-in will be concluded and further announcements will be issued in due course and as appropriate.”

READ: Providence Resources details new Barryroe drill programme

At the same time, Providence also confirmed that French oil major, Total, has now exercised its option to remain partnered in its Atlantic exploration venture, sealing its acquisition of a 35% stake in Frontier Exploration Licence 2/14 – which contains/contained the Druid, Drombeg, and Diablo assets.

Cairn Energy PLC (LON:CNE), meanwhile, has allowed its option to buy-into the Licence Option 16/27, the Avalon project, lapse. Total retains its 50% stake and operatorship of the Avalon venture.

Summing up the remaining portfolio adjustments, O’Reilly added: “Elsewhere in the portfolio, the impetus being shown by the ENI-led FEL 3/04 (Dunquin) partnership was best demonstrated by the JV's accelerated decision to license a new 3D seismic data-set over the area. 

READ: Cairn Energy in the middle of a “massive year” - broker

“It is hoped that these new data will help differentiate between the ‘breached’ Dunquin North structure and the potentially sealed Dunquin South exploration prospect. 

“Finally, as announced at the Atlantic Ireland conference in Dublin in October, we have committed to a pre-drill site survey in 2018 over our Newgrange prospect in FEL 6/14, where we hold an operated 80% interest and which is also the subject of significant commercial interest.”

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