PROVIDENCE RES. Providence Resources P.L.C. : Announcement Replacement

 
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: [phone] 
Tony O'Reilly, Chief Executive Officer 
 
Cenkos Securities plc                   Tel: [phone] 
Neil McDonald/Derrick Lee 
 
J&E Davy                                 Tel: [phone] 
Anthony Farrell 
 
MEDIA ENQUIRIES 
Powerscourt                             Tel: [phone] 
Lisa Kavanagh/Peter Ogden 
 
 Murray Consultants                      Tel: [phone] 
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)

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