PROVIDENCE RES. Providence Resources P.L.C. - Trading Update - Leadership In Drilling Offshore Ireland
December 28 2017 - 2:00AM
UK Regulatory
TIDMPVR
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Providence Resources P.l.c
TRADING UPDATE
LEADERSHIP IN DRILLING OFFSHORE IRELAND
-- TOTAL EXERCISES OPTION TO FARM-IN TO 35% OF FEL 2/14
(DRUID/DROMBEG/DIABLO)
-- CAIRN OPTION TO ACQUIRE 20% OF LO 16/27 LAPSES (AVALON)
-- PERIOD OF EXCLUSIVITY GRANTED TO POTENTIAL FARMINEE ON SEL 1/11
(BARRYROE)
Dublin and London - December 28, 2017 - Providence Resources P.l.c. (PVR
LN, PRP ID), the Irish based Oil & Gas Exploration Company, today
provides a trading update on its activities through the end of 2017.
Commenting today, Tony O'Reilly, Chief Executive of Providence said:
"2017 has been a significant year for Providence both commercially and
operationally with our main focus comprising the planning, consenting
and drilling of the 53/6-1 Druid/Drombeg exploration well. The Cairn
farm-in and TOTAL option over FEL 2/14 were pivotal commercial
transactions that allowed us deliver on our core stated objective from
our 2016 fundraising by securing incremental (>US$45 million) capital to
evaluate the deeper Drombeg prospect alongside the planned drilling of
Druid, whilst also providing surplus cash which is now being partially
deployed to the Barryroe project. These commercial transactions have
continued to evolve with TOTAL now exercising its option to farm-in for
a 35% interest and operatorship in FEL 2/14, subject to the approval of
the Minister of State at the Department of Communications, Climate
Action and Environment, thereby leaving Providence with a 28% interest
in FEL 2/14.
Coupled with these two farm-outs at FEL 2/14, we concluded a number of
commercial transactions on our recently awarded (2016) LO 16/27, which
contains the Avalon prospect. In June, TOTAL farmed-in for a 50%
interest and assumed operatorship of LO 16/27, whilst Cairn also secured
an option to take a 20% interest, which has now lapsed. Providence now
retains a 40% interest in LO 16/27.
In tandem with the Druid/Drombeg well operations, we also began various
work-scopes for the planned drilling of the 48/24-K Barryroe appraisal
well. These work-scopes include well planning and consenting, together
with the preparation of the Invitation to Tender ("ITT") for the
procurement of a drilling unit, which we plan to issue in early Q1 2018.
In parallel, the Company has continued to engage with interested
co-venture partners and earlier this month, having reached provisional
agreement on key commercial terms with a potential farminee, we have
granted a period of exclusivity to them in order to conclude contractual
negotiations which, if successful, would deliver a multi-well programme
at Barryroe. However, given its conditional nature and subjectivity to
final contracts, no specific commercial details are being released at
this time. Shareholders should note that there is no certainty that
this farm-in will be concluded and further announcements will be issued
in due course and as appropriate.
Elsewhere in the portfolio, the impetus being shown by the ENI-led FEL
3/04 (Dunquin) partnership was best demonstrated by the JV's accelerated
decision to license a new 3D seismic data-set over the area. It is
hoped that these new data will help differentiate between the "breached"
Dunquin North structure and the potentially sealed Dunquin South
exploration prospect. Finally, as announced at the Atlantic Ireland
conference in Dublin in October, we have committed to a pre-drill site
survey in 2018 over our Newgrange prospect in FEL 6/14, where we hold an
operated 80% interest and which is also the subject of significant
commercial interest.
OPERATIONAL HIGHLIGHTS
APPRAISAL
-- BARRYROE, North Celtic Sea Basin (SEL 1/11)
-- Farm-out discussions continue
-- Period of exclusivity granted to a potential farminee
-- Extension to the 1st phase of SEL 1/11 to July 2019 and overall license
extension of 2 years to July 2021
-- New 3D seismic uplift provides significantly enhanced visualisation of
Barryroe reservoir interval
-- Planning and consenting underway for 48/24-K well and sidetrack
-- Well location agreed by JV
-- Rig procurement process underway
-- Project Manager appointed
-- HELVICK & DUNMORE, North Celtic Sea Basin (LU)
-- Awarded Lease Undertakings
-- Assigned 10% equity in Helvick to MFDevCo and 10% equity to Lansdowne
-- Assigned 10% equity in Dunmore to MFDevCo
-- EXPLORATION
-- DRUID/DROMBEG/DIABLO, Southern Porcupine Basin (FEL 2/14)
-- Consenting and drilling of the 53/6-1 exploration well
o First well to be consented under the new Irish Petroleum
(Exploration and Extraction) Safety Act 2015
o Deepest water depth for any exploration well ever drilled offshore
North-West Europe
-- No Lost Time Incidents ("LTI's")
-- Paleocene Druid Target
o Reservoir interval encountered within the pre-drill depth prognosis,
but was water bearing
-- Lower Cretaceous Drombeg Target
o Reservoir interval encountered within the pre-drill depth prognosis,
but was water bearing
-- 53/6-1 exploration well plugged and abandoned in accordance with
pre-drill plan
-- Post-well data analysis ongoing
-- Cairn Farm-in to 30% of FEL 2/14
-- Capricorn Ireland Limited ("Capricorn"), a wholly owned subsidiary of
Cairn Energy PLC ("Cairn") paid 45% (US$18.9 million) of 53/6-1 well
costs, subject to a gross well cap of US$42 million, and thereafter at
30% cost share
-- Capricorn made a cash payment of US$2.82 million on a pro-rata 80/20
basis to Providence and Sosina
-- Capricorn also agreed methodology for a contingency appraisal well carry
on a 1.33 to 1 promote basis, subject to US$42 million gross well cap
-- TOTAL Option and Election to Farm-in to 35% of FEL 2/14
-- Option agreed with TOTAL E&P Ireland B.V. ("TOTAL"), a wholly owned
subsidiary of TOTAL S.A., giving TOTAL the right (but not the obligation)
to take a 35% working interest, via agreed farm-in
-- TOTAL paid US$27 million to Providence & Sosina (US$21.6 million &
US$5.4 million, respectively)
-- TOTAL has now exercised Option to farm-in for 35% working interest
and assume Operatorship
-- Farm-in and assumption of operatorship is subject to the approval by
the Minister of State at the of Communications, Climate Action and
Environment
-- AVALON, Southern Porcupine Basin (LO 16/27)
-- Technical work
-- Generated calibrated Petroleum Systems Model (PSM c.48,000 km2), which
supports the potential of a working petroleum system in LO 16/27
-- Model demonstrated that Avalon could potentially access a total
hydrocarbon resource charge of c. 8.67 BBO and c. 21.43 TSCF
(equivalent to c. 12 BBOE)
-- TOTAL Farm-In to 50% of LO 16/27
-- Agreement with TOTAL E&P Ireland B.V. ("TOTAL"), a wholly owned
subsidiary of TOTAL S.A., to farm-in for 50% interest and Operatorship
o TOTAL paid pro-rata share of past gross costs of c. US$0.175 million,
and 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$1.33 million
-- In the event that the JV partners agree to convert LO 16/27 into a
Frontier Exploration License, and a subsequent decision is taken to drill
an exploration well, TOTAL will pay 60% of the drilling costs, subject to
a gross well cap of US$ 42 million
-- Ministerial consent given to farm-in and transfer of Operatorship in
October 2017
-- Cairn Option to Farm-in to 20% of LO 16/27
-- Capricorn Ireland Limited ("Capricorn"), a wholly owned subsidiary of
Cairn Energy PLC ("Cairn"), granted Option to farm-in for 20% interest,
such Option declarable post the completion of the 53/6-1 well operations
-- Option lapsed in December 2017
-- DUNQUIN SOUTH, Southern Porcupine Basin (FEL 3/04)
-- Dunquin North post-well technical studies continued
-- Evidence of more significant residual oil in Dunquin North well
-- ENI assumed Operatorship following withdrawal of XOM
-- Providence equity increased to 26.846% following PAD consent to
assignment of XOM equity and closing of Atlantic farm-in
-- Licensed 1,800 km2 of 3D seismic data from CGG as part of their Porcupine
Basin multi-client 3D acquisition programme (acquired in June 2017)
-- KISH, Kish Bank Basin (SEL 2/11)
-- Ministerial consent granted to extend the 1st phase of SEL2/11 to August
2018 and an overall extension of one year to the license term to August
2020
-- NEWGRANGE, Goban Spur Basin (FEL 6/14)
-- Prepared scope for 2018 site survey and future drilling
-- Farm-out process ongoing
-- BOARD CHANGES
-- In May 2017, Angus McCoss joined the Board as a Non-Executive Director
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
Peter Ogden
Murray Consultants Tel: +353 1 498 0300
Pauline McAlester
ABOUT PROVIDENCE RESOURCES
Providence Resources is an Irish based Oil & Gas Exploration Company
with a portfolio of appraisal and exploration assets located offshore
Ireland. Providence's shares are quoted on the AIM in London and the
ESM in Dublin.
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 (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.
SUMMARY OF LICENCE INTERESTS
Providence
Ref Licence Issued Key Asset Operator Partners PVR % Classification
NORTH CELTIC SEA BASIN
Oil & gas
1 SEL 1/11 2011 BARRYROE Providence (Exola) Lansdowne 80.0 discovery
Atlantic; Oil & gas
2 SEL 2/07 2007 HOOK HEAD Providence Sosina 72.5 discovery
Atlantic;
Sosina,
Lansdowne; Oil & gas
3 LU 2016 HELVICK Providence MFDC 56.3 discovery
Atlantic;
Sosina;
4 LU 2016 DUNMORE Providence MFDC 65.3 Oil discovery
NORTHERN PORCUPINE BASIN
SPANISH Cairn (Capricorn Cairn; Oil & gas
5 FEL 2/04 2004 POINT Ireland) Sosina 58.0 discoveries
SPANISH
POINT Cairn (Capricorn Cairn; Oil & gas
5 FEL 4/08 2008 NTH Ireland) Sosina 58.0 exploration
SOUTHERN PORCUPINE BASIN
LO 16/27
1616/27FEL Oil & gas
6 3/04 2016 AVALON TOTAL Sosina 40.0 exploration
DRUID, TOTAL,
DROMBEG & Cairn; Oil & gas
7 FEL 2/14 2014 DIABLO TOTAL(1) Sosina 28.0 exploration
Eni;
Repsol; Oil
8 FEL 3/04 2014 DUNQUIN Eni Sosina 26.8 exploration
GOBAN SPUR BASIN
Oil & gas
9 FEL 6/14 2014 NEWGRANGE Providence Sosina 80.0 exploration
KISH BANK BASIN
Oil & gas
10 SEL 2/11 2011 KISH BANK Providence 100.0 exploration
ST GEORGE'S CHANNEL BASIN
Oil & Gas
11 SEL 1/07 2007 DRAGON Providence 100.0 exploration
(1) Operatorship and assignment of interest subject to Ministerial
Consent
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
December 28, 2017 02:00 ET (07:00 GMT)
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