PROVIDENCE RES. Providence Resources P.L.C. : Commercial Update Southern Porcupine Basin
08 March 2017 - 6:00PM
UK Regulatory
TIDMPVR
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Commercial Update
Frontier Exploration Licence 2/14
Southern Porcupine Basin
-- PROVIDENCE/SOSINA SIGN FARM-IN AGREEMENT WITH CAIRN FOR FEL 2/14
-- CAIRN TO SECURE A 30% WORKING INTEREST IN FEL 2/14
-- PROMOTED CARRY FOR ONE FIRM EXPLORATION WELL AND ONE CONTINGENT APPRAISAL
WELL
Dublin and London - March 8, 2017 - Providence Resources P.l.c. (PVR LN,
PRP ID), the Irish based Oil and Gas Exploration Company, today provides
an operational update on the Frontier Exploration Licence ("FEL") 2/14,
which lies in c. 2,250 metre water depth in the southern Porcupine Basin
and is located c. 220 kilometres off the south west coast of Ireland.
The licence is operated by Providence Resources P.l.c. ("Providence",
80%) on behalf of its partner Sosina Exploration Limited ("Sosina",
20%). FEL 2/14 contains the Paleocene "Druid", Lower Cretaceous
"Drombeg" and Jurassic "Diablo" exploration prospects.
Frontier Exploration Licence 2/14 Farm In
Providence has signed a Farm-in Agreement ("FIA") with Capricorn Ireland
Limited ("Capricorn"), a wholly owned subsidiary of Cairn Energy Plc
("Cairn") over FEL 2/14 with an effective date of July 1, 2016.
In consideration for Capricorn taking a 30% working interest in FEL
2/14, Capricorn will pay:
-- 45% of the costs of drilling the 53/6-A exploration well in 2017, subject
to a gross well cap of $42 million
-- A cash payment of $2.82 million (being 30% of the total sunk costs of
$9.4 million incurred through June 30, 2016 by Providence / Sosina on FEL
2/14) on a pro rata basis
The 53/6-A well is planned to spud in June 2017 (subject to all
regulatory consents) using the contracted Stena IceMAX drill-ship
targeting the Druid and Drombeg prospects.
In the event that the JV partners agree to drill a subsequent appraisal
well in FEL 2/14, Capricorn will pay 40% of the appraisal well costs
subject to a gross well cap of $42 million and will have the right to
take over Operatorship.
As a result of this transaction, the resulting equity in FEL 2/14 will
be Providence (Operator - 56%), Capricorn (30%) and Sosina (14%).
Closing of the farm-in is subject to the approval of the Minister of
Communications, Climate Action and Environment.
Speaking today, Tony O'Reilly, Chief Executive of Providence said:
"We are extremely pleased to have agreed this farm-in transaction with a
world class partner such as Cairn, who have recently enjoyed
considerable success with their Atlantic deep-water exploration
programme offshore Senegal. The addition of Cairn brings additional
technical capabilities to the JV partnership, whilst providing
Providence with additional financial and operational flexibility. This
licence has attracted considerable interest and we continue to discuss
possible further equity divestment with other material industry players.
With the Stena IceMAX drill-ship already contracted, the JV partners are
currently carrying out a pre-drill well site survey as well as
finalizing all other key service contracts, together with requisite
permitting and regulatory approvals, for the planned drilling operations
in June."
INVESTOR ENQUIRIES
Providence Resources P.l.c. Tel: +353 1 219 4074
Tony O'Reilly, Chief Executive Officer
Cenkos Securities plc Tel: +44 131 220 9771
Neil McDonald/Derrick Lee
J&E Davy Tel: +353 1 679 6363
Anthony Farrell
MEDIA ENQUIRIES
Powerscourt Tel: +44 207 250 1446
Lisa Kavanagh/Peter Ogden
Murray Consultants Tel: +353 1 498 0300
Pauline McAlester
ABOUT PROVIDENCE RESOURCES
Providence Resources is an Irish based Oil and Gas Exploration Company
with a portfolio of appraisal and exploration assets located offshore
Ireland. Providence's shares are quoted on AIM in London and the ESM in
Dublin.
ABOUT CAIRN
Cairn Energy PLC is one of Europe's leading independent oil and gas
exploration and development companies and is listed on the London Stock
Exchange. Cairn has discovered and developed oil and gas reserves in a
variety of locations around the world. Cairn's business operations are
focused on opportunities across a growing resource base in Senegal, the
UK and Norway. Cairn's portfolio also includes assets in Africa and the
Mediterranean. Cairn is headquartered in Edinburgh, Scotland with
operational offices in London, Norway and Senegal.
ABOUT FEL 2/14 - DRUID & DROMBEG
During the initial pre-FEL 2/14 authorisation phase (Licensing Option
11/9 - 2011 through 2013), Providence and Sosina identified two large
vertically stacked Paleocene ('Druid') and Lower Cretaceous ('Drombeg')
fan systems with notable Class II amplitude versus offset ("AVO")
anomalies primarily from 2D seismic data acquired in 2008. Providence
and Sosina subsequently agreed to underwrite a multi-client 3D seismic
survey over the area. This 3D survey was acquired by Polarcus in the
summer of 2014 and was subsequently processed by ION Geophysical in
2014/15. In September 2015, Providence and Sosina entered into a
Strategic Exploration Collaboration Project with Schlumberger.
In April 2016, the results of the Strategic Exploration Collaboration
Project with Schlumberger were announced:
DRUID (PALEOCENE)
-- Two fans located c. 1,750 m BML and structurally up-dip from a potential
significant fluid escape feature from the underlying pre-Cretaceous
Diablo Ridge
-- Cumulative in-place un-risked prospective resources of 3.180 BBO (PMean);
Fan 1 - 984 MMBO (PMean); Fan 2 - 2,196 MMBO (PMean)
-- Pre-stack seismic inversion and regional rock physics analysis shows
Druid is consistent with a highly porous (30%) and high net-gross, light
oil-filled sandstone reservoir system up to 85 metres thick
-- A depth conformant Class II AVO anomaly is present and synthetic forward
modelling of an oil-water contact correlates with the observed seismic
response
-- Spectral decomposition, seismic compactional drape and mounding are
reflective of a large sand-rich submarine fan system with no significant
internal faulting and clear demonstration of an up-dip trap mechanism
-- Geomechanical analysis using regional well and high resolution seismic
velocity data indicates that Druid is normally pressured and the top seal
is intact
DROMBEG PROSPECT (LOWER CRETACEOUS)
-- Located c. 2,750 m BML and structurally up-dip from a potential
significant fluid escape feature from the underlying pre-Cretaceous
Diablo Ridge
-- In-place un-risked prospective resource of 1.915 BBO (PMean)
-- Pre-stack seismic inversion and regional rock physics analysis shows
Drombeg is consistent with a highly porous (20%), light oil-filled
sandstone reservoir system up to 45 metres thick
-- A depth conformant amplitude anomaly is present and spectral
decomposition is reflective of a large sand-rich submarine fan system
with no significant internal faulting, and supports an up-dip trap
mechanism
-- Geomechanical analysis using regional well and high resolution seismic
velocity data indicates that Drombeg is over-pressured with an intact top
seal
ABOUT STENA ICEMAX
Stena IceMAX is the world's first dynamically positioned, dual mast
ice-class drillship. The Stena IceMAX is a Harsh Environment DP Class 3
drillship capable of drilling in water depths up to 10,000ft. The IceMAX
has on-board 2 x BOP's, each 18 3/4" x 15,000psi Cameron "TL" BOP c/w ST
Locks, and uses Cameron Load King riser. The vessel was delivered in
April 2012.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Providence Resources plc via Globenewswire
http://www.providenceresources.com/html/
(END) Dow Jones Newswires
March 08, 2017 02:00 ET (07:00 GMT)
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