PROVIDENCE RES. Providence Resources P.L.C. : Announcement Replacement
08 June 2017 - 3:08AM
UK Regulatory
TIDMPVR
This announcement replaces the announcement released by the Company at
07:01 today, which contained an incorrect reference to "FEL 2/14" in the
second paragraph under the title 'Option Agreement with Cairn for 20%
Working Interest', rather than "LO16/27". All other details remain
unchanged.
The full amended text is shown below.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Commercial Update
Licensing Option 16/27
Southern Porcupine Basin
-- PROVIDENCE & SOSINA SIGN FARM-IN AGREEMENT WITH TOTAL
-- TOTAL TO SECURE A 50% WORKING INTEREST AND OPERATORSHIP IN LO
16/27
-- CARRY FOR OPERATIONAL COSTS & CONTINGENT PROMOTED CARRY FOR THE
FIRST EXPLORATION WELL
-- PROVIDENCE & SOSINA SIGN OPTION AGREEMENT WITH CAIRN ENERGY
-- CAIRN SECURES AN OPTION OVER 20% WORKING INTEREST IN LO 16/27
Dublin and London - June 7, 2017 - Providence Resources P.l.c. (PVR LN,
PRP ID), the Irish based Oil and Gas Exploration Company, provides a
commercial update on Licensing Option ("LO") 16/27, which lies in c.
1,300 metre water depth in the southern Porcupine Basin and is located
c. 150 kilometres off the south west coast of Ireland. The Licencing
Option is operated by Providence Resources P.l.c. ("Providence", 80%) on
behalf of its partner Sosina Exploration Limited ("Sosina", 20%). LO
16/27 contains the Paleocene "Avalon" exploration prospect.
Farm-in Agreement with TOTAL for 50% Working Interest
Providence and Sosina have signed a Farm-in Agreement ("FIA") with TOTAL
E&P Ireland B.V. ("TOTAL"), a wholly owned subsidiary of TOTAL S.A. In
consideration for TOTAL taking a 50% working interest in LO 16/27, TOTAL
will:
-- Pay its pro-rata share of past gross costs of c. US$ 0.175 million
-- In addition to its pro-rata share, pay 21.4% of the past and future costs
during the 2-year term of LO 16/27, subject to a gross cost cap of US$
1.33 million
-- Under the terms of the FIA, and subject to Ministerial approval, TOTAL
will assume Operatorship of LO 16/27 and any subsequent licensing
authorisations issued
-- In the event that the JV partners agree to convert LO 16/27 into a
Frontier Exploration Licence, and a subsequent decision is taken to drill
an exploration well, TOTAL will pay 60% of the drilling costs, subject to
a gross well cap of US$ 42 million
The TOTAL farm-in is subject to the approval of the Minister of
Communications, Climate Action and Environment. Subject to this, the
resultant equity in LO 16/27 will be TOTAL (Operator - 50%), Providence
(40%) and Sosina (10%).
Option Agreement with Cairn for 20% Working Interest
Providence and Sosina have signed an Option Agreement (the "Option")
with Capricorn Ireland Limited ("Capricorn"), a wholly owned subsidiary
of Cairn Energy PLC ("Cairn"). Under the terms of the Option, Capricorn
has the right to farm-in to a 20% working interest in LO 16/27 from
Providence & Sosina. The Option can be exercised by Capricorn within 60
days of the completion (plugging and abandoning) of the upcoming 53/6-A
well on Frontier Exploration Licence 2/14.
If Capricorn elects to exercise the Option, Providence, Sosina and
Capricorn will enter into an agreed Farm-in Agreement ("FIA") to effect
the transfer of a 20% working interest in LO 16/27 to Capricorn, based
on the following terms where Capricorn will:
-- Pay its pro-rata share of past gross costs of up to US$ 0.175 million
-- In addition to its pro-rata share, pay 8.6% of the past and future costs
during the 2-year term of LO 16/27, subject to a gross cost cap of US$
1.33 million
-- In the event that the JV partners agree to convert LO 16/27 into a
Frontier Exploration Licence, and a subsequent decision is taken to drill
an exploration well, Capricorn will pay 24% of the drilling costs,
subject to a gross well cap of US$ 42 million
In the event that Capricorn exercises the Option, the final equity would
be TOTAL (Operator - 50%), Providence (24%), Capricorn (20%) and Sosina
(6%). Conclusion of any farm-in by Cairn would be subject to the
approval by the Minister of Communications, Climate Action and
Environment.
Speaking today, Tony O'Reilly, Chief Executive of Providence said:
"We are delighted to have agreed this farm-in transaction on Avalon with
one of the world's leading E&P companies which provides further
significant technical, financial and operational capability to the LO
16/27 joint venture group. We are also pleased to announce this option
agreement with Cairn. This further potential transaction would serve to
create a common partnership with our nearby Druid block with which
Avalon shares many geological similarities."
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 TOTAL
Total is a global integrated energy producer and provider, a leading
international oil and gas company, and a major player in solar energy
with SunPower and Total Solar. Our 98,000 employees are committed to
better energy that is safer, cleaner, more efficient, more innovative
and accessible to as many people as possible. As a responsible corporate
citizen, we focus on ensuring that our operations in more than 130
countries worldwide consistently deliver economic, social and
environmental benefits. total.com http://www.total.com
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 is headquartered in Edinburgh, Scotland with
operational offices in London, Norway and Senegal.
ANNOUNCEMENT
This announcement has been reviewed by Dr John O'Sullivan, Technical
Director, Providence Resources P.l.c. John is a geology graduate of
University College, Cork and holds a Masters in Applied Geophysics from
the National University of Ireland, Galway. He also holds a Masters in
Technology Management from the Smurfit Graduate School of Business at
University College Dublin and a doctorate in Geology from Trinity
College Dublin. John is a Chartered Geologist and a Fellow of the
Geological Society of London. He is also a member of the Petroleum
Exploration Society of Great Britain, the Society of Petroleum Engineers
and the Geophysical Association of Ireland. John has more than 25 years
of experience in the oil and gas exploration and production industry
having previously worked with both Mobil and Marathon Oil. John is a
qualified person as defined in the guidance note for Mining Oil & Gas
Companies, March 2006 of the London Stock Exchange. Definitions in this
press release are consistent with SPE guidelines. SPE/WPC/AAPG/SPEE
Petroleum Resource Management System 2007 has been used in preparing
this announcement.
ABOUT AVALON
Providence (80%) and Sosina (20%) were awarded Licensing Option 16/27 in
July 2016 as part of the 2015 Atlantic Margin Licensing Round. During
regional interpretation and mapping of vintage 2D seismic reflection
data, Providence identified an areally extensive (c. 550 km(2) )
north-south orientated Paleocene basin-floor channel and fan system
('Avalon') within the axial part of the Porcupine Basin.
The Avalon system, which is located c. 2,500 metres BML, is interpreted
to be sourced from the north of the basin and shales out in a southerly
distal direction. A structural flexure down to the north negates the
requirement for sandstone pinch out in the proximal direction, greatly
improving reservoir sealing potential. The presence of a thick sandstone
interval is indicated by compactional drape morphologies which are
imaged within parts of the system. The pre-existing Mesozoic structural
grain appears to have exerted some control on deposition as evidenced by
thickening of the system within pre-existing structural lows.
Whilst limited seismic reflection gather data were available during the
evaluation phase, the available data suggest the potential for a
depth-conformant amplitude versus offset ('AVO') anomaly similar to the
nearby Druid prospect in FEL 2/14. The main element of the agreed work
programme during the 2-year Option period is the purchase, reprocessing
and interpretation of existing 2D seismic reflection data.
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
June 07, 2017 13:08 ET (17:08 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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