Providence Resources P.l.c., has signed an agreement with San Leon Energy Plc which will see Providence increase its working interest in Standard Exploration Licence 1/11 („Licence‟) from 50% to 80%.
Under the terms of the agreement, Providence will assume San Leon‟s 30% working interest in the Licence, and in exchange, San Leon will receive a 4.5% NPI („Net Profit Interest‟) in the Licence. Subject to Irish governmental approval, Providence will have an 80% interest in the Licence and will continue as operator. Lansdowne Oil & Gas Plc (“Lansdowne”) will retain a 20% interest in the Licence.
Commenting on the increase in equity, Tony O‟Reilly, CEO said:
“This transaction makes perfect strategic sense for both companies, allowing each to focus on their respective core areas. Providence remains firmly focused on its Irish portfolio, with the Barryroe appraisal well being the first well of its multi-year, multi-basin drilling programme. We look forward to updating shareholders on the progress of the drilling at Barryroe over the coming weeks.”
The Barryroe licence lies directly below the Seven Heads Gas Field and has been successfully tested at flow rates of between 1,300 and 1,600 BOPD, from three exploration and appraisal wells. The reservoir sands are of Cretaceous Middle and Lower Wealden age located between c. 4,500‟ TVDSS and 7,550‟ TVDSS. The oil is light (30 to 42 degrees API) and contains relatively high wax content ranging from 12 to 22 per cent, which may require treatment at surface. Providence holds a 80% interest in the licence and operates on behalf of its partner Lansdowne Oil and Gas Plc (20%).A third party audit carried out by RPS Energy for Lansdowne Oil & Gas plc indicated P50 and P10 STOIIP estimates for Barryroe of 373 MMBO and 893 MMBO, respectively.
[mappress] Offshore Energy Today Staff , December 23, 2011; Image: Providence Resources