www.providenceresources.com
The combination of board and management talent, together with Providence's major shareholder worldwide network, presents a unique ability to succeed on the international stage. Providence has appropriate experience in the financing of large developments and is well equipped to plan and access finance for a wide range of activities and projects. Providence has established banking relations with a number of leading international financial institutions.
Since its formation, Providence has built a diversified portfolio of oil and gas exploration licences and concessions with the key focus being the pursuit of exploration and appraisal interests offshore Ireland. The Company’s board and management have a well-established background in the oil and gas business having worked closely with many major companies throughout the world. Providence works with leading companies including ExxonMobil, Repsol, ENI, Petronas, Chrysaor and Nautical Petroleum.
Providence Resources provides encouraging drill update from Barryroe
Providence Resources (LON:PVR) this morning gave an encouraging update on its first well on the Barryroe Field in Ireland’s Celtic Sea.
Drilling began towards the end of last month and has reached a depth of 4,038 feet.
In doing so it has encountered “notable gas flows” as the drill bit moved through the PSE Seven Heads-operated gas reservoir.
Providence found the reservoir in almost exactly the area it expected to find gas based on its “pre-drill prognosis”.
The plan is now to drill well 48/24-10 to a total depth of 7,464 feet.
Providence technical Director John O’Sullivan said: “We are pleased to provide this interim operational update and to confirm that we are geologically on prognosis, with the main oil bearing reservoir objectives lying ahead of the drill-bit.
“The accuracy of the new 3D seismic data in mapping the overlying gas reservoir section gives us confidence in relation to the delineation of our underlying primary and secondary oil targets."
Using the GSF Arctic III semi-submersible rig, the “spudding” of the appraisal well took place on November 20, with drilling and test work expected to take 60 days.
Its location and programme were finalised using recently processed 3D seismic volume, Providence said.
The well will primarily re-assess the previous Marathon Oil operated 48/24-3 well, which found light sweet crude that flowed at around 1,600 barrels a day from base Cretaceous sands.
Using the latest technology, 48/24-J will acquire a modern set of data, including wire-line logs and samples.
The objective will be to demonstrate commercial flow rates of 1,800 barrels a day or better from this vertical well.
Discovered in the 1970s, Barryroe previously flowed oil at the rate of 1,400-1,600 barrels a day.
A flow rate above 1,800 barrels a day makes Barryroe economic, according to an independent report compiled by RPS, which also estimates there is 60 million barrels of crude recoverable from 373 million barrels in place.
The economics of the field show that this one development prospect could be transformational.
Based on the field’s P50 reserves – those with a 50 per cent chance or better of being recovered - the net present value for Barryroe is just over US$800 million using a 10 per cent discount rate.
Barryroe kicks off a frenetic exploration and development programme worth US$500 million, with the London and Dublin-listed Providence footing US$120 million of that bill.
Following shortly after Barryroe is a re-drill of the nearby Hook Head field. Here Providence owns 72.5 per cent and like Barryroe it is the operator of the field.
Samples suggest it is a mid-gravity, high pour, waxy crude, with 20 million barrels recoverable.
A well was drilled in 2007, which “petered out” due to water ingress, with boss Tony O’Reilly blaming the engineering rather than the geology for the flop.
From these two development plays, the group will then move on to two exploration plays – Dalkey Island off the coast of Dublin and Rathlin Island, off the north-eastern corner of Northern Ireland.
The latter is an onshore-offshore play. It is onshore in that all the drilling, due to get underway in the fourth quarter of this year or early next, can take place on dry land. However, the group is also planning to chase the off-shore licences around the Rathlin prospect.
After that the emphasis changes from east coast to the west, and Providence is heading very much further offshore in the pursuit of oil and gas.
Spanish Point is a gas condensate discovery located 125 miles offshore. It was found in 1981 when Ireland simply did not need gas in the quantities thought to be contained at Spanish Point and there was no infrastructure by which to exploit it – that has all now changed.
Providence estimates there are 200 million barrels of oil equivalent. It owns a 56 per cent stake, which will fall to 32 per cent when partner Chrysaor formally agrees to drill two wells there.
Those who follow Providence closely will know that Dunquin is the big daddy of all its exploration projects, and it has an all-star roster.
ExxonMobil is a 40 per cent shareholder and the operator, while ENI farmed in for a 40 per cent stake in 2009. SOSINA holds 4 per cent, leaving Providence with 16 per cent.
Work is expected to get underway on Dunquin in mid-2012 and will be followed in the autumn of next year by an appraisal well on the Dragon Field, which is equidistant between Wales and Ireland.
It also has a producing asset in Singleton in West Sussex. Oil revenues from this source will be used to help fund the company’s exploration activities.
