PROVIDENCE RES. Providence Resources P.L.C - Operational Update - Frontier Exploration Licence 2/14 - Druid Southern Porcupin...

 
TIDMPVR 
 
 
   THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 
 
   Operational Update 
 
   Frontier Exploration Licence 2/14 - Druid 
 
   Southern Porcupine Basin 
 
 
   -- Invitation to tender  ("ITT") issued for the provision of a deep-water 
      drilling unit 
 
   -- Druid well design to allow for optional penetration of underlying Drombeg 
      prospect 
 
   -- Planned spud date for Druid well is June 2017 
 
 
   Dublin and London - September 15, 2016 - Providence Resources P.l.c. 
(PVR LN, PRP ID), the Irish based Oil and Gas Exploration Company, today 
provides an operational update on 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%), collectively referred to the "Druid Partners".  FEL 
2/14 contains the Paleocene "Druid" and the Lower Cretaceous "Drombeg" 
exploration prospects. 
 
   Issuance of Rig ITT 
 
   Further to the RNS of August 31, 2016, confirming the Druid Partners' 
appointment of Senergy Wells Limited (a wholly owned subsidiary of 
Lloyds Register) to provide integrated well management services for the 
planned 2017 Druid drilling programme, an invitation to tender for the 
rig contract has now formally been issued to the market.   It is 
expected that the rig contract will be signed during Q4 2016 to 
facilitate summer 2017 drilling. 
 
   Well Engineering & Design 
 
   The detailed well engineering and design for the 2017 Druid exploration 
well is continuing with the well currently being designed to TD at a 
depth of c. 4,200 metres true vertical depth subsea ("TVDSS"), which 
allows for a full evaluation of the resource potential of the Paleocene 
Druid exploration prospect.  The well is also being designed to allow 
for a potential deepening of the well to encounter the underlying 
vertically stacked Lower Cretaceous Drombeg prospect at c. 5,200 m 
TVDSS.  This deepening could occur should the Druid exploration well be 
drilled significantly within the current budget and/or if a third party 
farminee were to provide additional capital to the project. 
 
   Well Cost Estimate 
 
   As disclosed by RNS on August 31, 2016, the latest gross (100%) well 
cost for the Druid exploration well is now estimated at c. $35 million, 
which compares to the previous estimate of $46 million.  Based on the 
latest market intelligence, the additional cost for the deepening of the 
well to penetrate the Drombeg prospect amounts to c. $15 million. 
 
   Farm-out Process 
 
   As disclosed by RNS on March 11 2016, the Company launched a farm out 
process in March 2016 with physical data-rooms commencing in late May 
2016.  The successful financial restructuring of the business with the 
provision of specific capital to undertake the Druid drilling operations, 
together with the substantially lower costs, has allowed the Druid 
Partners to move forward with the planned drilling operations.  Noting 
the significant interest shown in the recent Atlantic Licensing Round, 
the Druid Partners are continuing this farm-out process which has 
garnered very good industry interest. 
 
   Project Timeline 
 
   In addition to the preparation and issuance of the ITT for the rig, 
other service contracts are now being prepared for the planned Druid 
drilling operations.  Based on the latest project timeline and, subject 
to standard regulatory consents, the 53/6-A Druid exploration well is 
currently expected to spud in June 2017. 
 
   Speaking today, Tony O'Reilly, Chief Executive of Providence said: 
 
   "Thanks to the support of our shareholders, plus the substantially lower 
forecast cost profile, we are making solid progress with our planned 
drilling operations in FEL 2/14 for summer 2017. As previously stated, 
our base case programme continues to be a test of the c. 3 BBO resource 
potential of the Druid exploration prospect. We are, however, also 
engineering the planned well to allow for the penetration of the 
underlying c. 1.9 BBO Drombeg exploration prospect should the 
opportunity arise." 
 
 
 
 
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 DRUID 
 
   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 subsequently processed by ION Geophysical in 2014/15. 
 
 
   In September 2015, the Company entered into a Strategic Exploration 
Collaboration Project with Schlumberger. 
 
   In April 2016, the Company published the main results of this Project 
relating to Druid: 
 
   -- 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) 
 
   o   Fan 1 - 984 MMBO (PMean) 
 
   o   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 
 
   -- Geo-mechanical analysis using regional well and high resolution 
seismic velocity data indicates that Druid is normally pressured and the 
top seal is intact 
 
 
 
   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. 
 
   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

September 15, 2016 02:01 ET (06:01 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.