PROVIDENCE RES. Providence Resources P.L.C. : Commercial Update Southern Porcupine Basin

 
TIDMPVR 
 
 
   THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 
 
   Commercial Update 
 
   Frontier Exploration Licence 2/14 
 
   Southern Porcupine Basin 
 
 
   -- PROVIDENCE/SOSINA SIGN FARM-IN AGREEMENT WITH CAIRN FOR FEL 2/14 
 
   -- CAIRN TO SECURE A 30% WORKING INTEREST IN FEL 2/14 
 
   -- PROMOTED CARRY FOR ONE FIRM EXPLORATION WELL AND ONE CONTINGENT APPRAISAL 
      WELL 
 
 
   Dublin and London - March 8, 2017 - Providence Resources P.l.c. (PVR LN, 
PRP ID), the Irish based Oil and Gas Exploration Company, today provides 
an operational update on the Frontier Exploration Licence ("FEL") 2/14, 
which lies in c. 2,250 metre water depth in the southern Porcupine Basin 
and is located c. 220 kilometres off the south west coast of Ireland. 
The licence is operated by Providence Resources P.l.c. ("Providence", 
80%) on behalf of its partner Sosina Exploration Limited ("Sosina", 
20%).  FEL 2/14 contains the Paleocene "Druid", Lower Cretaceous 
"Drombeg" and Jurassic "Diablo" exploration prospects. 
 
   Frontier Exploration Licence 2/14 Farm In 
 
   Providence has signed a Farm-in Agreement ("FIA") with Capricorn Ireland 
Limited ("Capricorn"), a wholly owned subsidiary of Cairn Energy Plc 
("Cairn") over FEL 2/14 with an effective date of July 1, 2016. 
 
   In consideration for Capricorn taking a 30% working interest in FEL 
2/14, Capricorn will pay: 
 
 
   -- 45% of the costs of drilling the 53/6-A exploration well in 2017, subject 
      to a gross well cap of $42 million 
 
   -- A cash payment of $2.82 million (being 30% of the total sunk costs of 
      $9.4 million incurred through June 30, 2016 by Providence / Sosina on FEL 
      2/14) on a pro rata basis 
 
 
   The 53/6-A well is planned to spud in June 2017 (subject to all 
regulatory consents) using the contracted Stena IceMAX drill-ship 
targeting the Druid and Drombeg prospects. 
 
   In the event that the JV partners agree to drill a subsequent appraisal 
well in FEL 2/14, Capricorn will pay 40% of the appraisal well costs 
subject to a gross well cap of $42 million and will have the right to 
take over Operatorship. 
 
   As a result of this transaction, the resulting equity in FEL 2/14 will 
be Providence (Operator - 56%), Capricorn (30%) and Sosina (14%). 
Closing of the farm-in is subject to the approval of the Minister of 
Communications, Climate Action and Environment. 
 
   Speaking today, Tony O'Reilly, Chief Executive of Providence said: 
 
   "We are extremely pleased to have agreed this farm-in transaction with a 
world class partner such as Cairn, who have recently enjoyed 
considerable success with their Atlantic deep-water exploration 
programme offshore Senegal. The addition of Cairn brings additional 
technical capabilities to the JV partnership, whilst providing 
Providence with additional financial and operational flexibility. This 
licence has attracted considerable interest and we continue to discuss 
possible further equity divestment with other material industry players. 
 
   With the Stena IceMAX drill-ship already contracted, the JV partners are 
currently carrying out a pre-drill well site survey as well as 
finalizing all other key service contracts, together with requisite 
permitting and regulatory approvals, for the planned drilling operations 
in June." 
 
 
 
 
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 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's portfolio also includes assets in Africa and the 
Mediterranean. Cairn is headquartered in Edinburgh, Scotland with 
operational offices in London, Norway and Senegal. 
 
   ABOUT FEL 2/14 - DRUID & DROMBEG 
 
   During the initial pre-FEL 2/14 authorisation phase (Licensing Option 
11/9 - 2011 through 2013), Providence and Sosina identified two large 
vertically stacked Paleocene ('Druid') and Lower Cretaceous ('Drombeg') 
fan systems with notable Class II amplitude versus offset ("AVO") 
anomalies primarily from 2D seismic data acquired in 2008.  Providence 
and Sosina subsequently agreed to underwrite a multi-client 3D seismic 
survey over the area.  This 3D survey was acquired by Polarcus in the 
summer of 2014 and was subsequently processed by ION Geophysical in 
2014/15.  In September 2015, Providence and Sosina entered into a 
Strategic Exploration Collaboration Project with Schlumberger. 
 
   In April 2016, the results of the Strategic Exploration Collaboration 
Project with Schlumberger were announced: 
 
   DRUID (PALEOCENE) 
 
 
   -- Two fans located c. 1,750 m BML and structurally up-dip from a potential 
      significant fluid escape feature from the underlying pre-Cretaceous 
      Diablo Ridge 
 
 
   -- Cumulative in-place un-risked prospective resources of 3.180 BBO (PMean); 
      Fan 1 - 984 MMBO (PMean); Fan 2 - 2,196 MMBO (PMean) 
 
 
   -- Pre-stack seismic inversion and regional rock physics analysis shows 
      Druid is consistent with a highly porous (30%) and high net-gross, light 
      oil-filled sandstone reservoir system up to 85 metres thick 
 
   -- A depth conformant Class II AVO anomaly is present and synthetic forward 
      modelling of an oil-water contact correlates with the observed seismic 
      response 
 
   -- Spectral decomposition, seismic compactional drape and mounding are 
      reflective of a large sand-rich submarine fan system with no significant 
      internal faulting and clear demonstration of an up-dip trap mechanism 
 
   -- Geomechanical analysis using regional well and high resolution seismic 
      velocity data indicates that Druid is normally pressured and the top seal 
      is intact 
 
 
   DROMBEG PROSPECT (LOWER CRETACEOUS) 
 
 
   -- Located c. 2,750 m BML and structurally up-dip from a potential 
      significant fluid escape feature from the underlying pre-Cretaceous 
      Diablo Ridge 
 
   -- In-place un-risked prospective resource of 1.915 BBO (PMean) 
 
   -- Pre-stack seismic inversion and regional rock physics analysis shows 
      Drombeg is consistent with a highly porous (20%), light oil-filled 
      sandstone reservoir system up to 45 metres thick 
 
   -- A depth conformant amplitude anomaly is present and spectral 
      decomposition is reflective of a large sand-rich submarine fan system 
      with no significant internal faulting, and supports an up-dip trap 
      mechanism 
 
   -- Geomechanical analysis using regional well and high resolution seismic 
      velocity data indicates that Drombeg is over-pressured with an intact top 
      seal 
 
   ABOUT STENA ICEMAX 
 
   Stena IceMAX is the world's first dynamically positioned, dual mast 
ice-class drillship. The Stena IceMAX is a Harsh Environment DP Class 3 
drillship capable of drilling in water depths up to 10,000ft. The IceMAX 
has on-board 2 x BOP's, each 18 3/4" x 15,000psi Cameron "TL" BOP c/w ST 
Locks, and uses Cameron Load King riser. The vessel was delivered in 
April 2012. 
 
   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

March 08, 2017 02:00 ET (07:00 GMT)

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