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Providence Resources: drilling set to commence in Summer 2017

Published by
Oilfield Technology,

Chief Executive Officer, Tony O'reilly, comments on the company's progress in 2016 and drilling plans for 2017.

With the support of existing and new investors, we successfully raised new funds in July 2016 which allowed us to restructure our balance sheet, repay all of our debt, and with some recovery in the oil price, we are pleased to report that farm-in activity has increased. This has enabled us to enter into discussions regarding new commercial opportunities, which are ongoing.

Off the west coast of Ireland, having made meaningful progress developing our portfolio and demonstrating its economic potential, we have also seen a marked increase in interest from industry in the region. In this new operating environment, we were able to announce the farm-in by Cairn into our Druid & Drombeg drilling programme, which will see Providence’s cost exposure nearly halve. This puts us in an even stronger financial position, providing us with incremental cash resources whilst still allowing scope for further transactions. In this regard, farm-out negotiations are ongoing with various counterparties on a number of our assets. Whilst we are not in a position to confirm any further details at this time, we are working diligently to successfully conclude matters.

This summer, we are embarking on a very exciting period of operations starting with the drilling of a high impact exploration well targeting the multi-billion barrel potential of both the Druid & Drombeg exploration prospects. The Stena IceMAX drill-ship is already contracted and we expect drilling operations to commence in June, subject to the normal regulatory consents. The recently announced licensing of 3D seismic data to be acquired over the Dunquin prospect this summer is another key development which will further enhance our understanding of the hydrocarbon potential of this licence, which is now operated by Eni.

Our farm-in transaction with Cairn, combined with our ongoing commercial discussions and the other extensive work programmes currently being carried out offshore Ireland by the majors including ExxonMobil, Statoil, Eni, Nexen CNOOC, Woodside and Cairn clearly demonstrate the industry’s renewed focus on the Irish offshore. In the North Celtic Sea Basin, the further appraisal and potential development of Barryroe remains another key objective for Providence. With this in mind, we are commencing various prepermitting activities in anticipation of future drilling.

As the most active player in the region, with 20 years’ operational experience generally and specifically some 14 years since we first licenced acreage in the Porcupine Basin, we will continue to seek to capitalise on this enhanced interest for the benefit of Providence’s shareholders.”

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