Providence Resources upbeat on conversion of Irish licence

Ireland-based oil and gas exploration company Providence Resources updated the market on Licensing Option 16/27, operated by Total E&P Ireland, on Friday.

The AIM-traded firm said the operator Total held a 50.0% share, with itself owning 40.0% and Sosina Exploration having 10.0%.

It described LO 16/27 as being located in the southern Porcupine Basin, offshore Ireland, which contained the undrilled Paleocene ‘Avalon’ exploration prospect.

The joint venture partners recently applied to convert LO 16/27 to a Frontier Exploration Licence (FEL), and confirmed that the Minister of State at the Department of Communications, Climate Action and Environment had now confirmed approval for the partners to convert LO 16/27 to FEL 2/19, with effect from 1 February.

Under the terms of a farm-out agreement, which was agreed between the partners in June 2017, in the event that a decision was taken to drill an exploration well on Avalon, Total would pay 60% of the drilling costs, subject to a gross well cap of $42m.

“We are very pleased to confirm approval from the minister to progress the Avalon Licensing Option to Frontier Exploration Licence status,” said Providence technical director John O’Sullivan.

“Avalon is a very large and exciting prospect, which lies adjacent to Dunquin North, and the joint venture partners look forward to progressing it further under the operatorship of Total,” Dr O’Sullivan added.