PROVIDENCE RES. Providence Resources P.L.C. - Trading Update - Leadership In Drilling Offshore Ireland

 
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: [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] 
Peter Ogden 
 
Murray Consultants                      Tel: [phone] 
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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