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Providence Resources launches Spanish Point farm-out process

Published: 03:57 27 Oct 2015 EDT

dublin
Providence is formally launching the process today at the Atlantic Ireland conference in Dublin

Providence Resources (LON:PVR) is launching a farm-out of a 32% stake in the Cairn Energy operated Spanish Point project, offshore Ireland.

The AIM quoted firm currently has 58% of Spanish Point, where appraisal drilling is slated for 2017.

Spanish Point, located in Ireland’s increasingly high profile Atlantic Margin, is currently believed to host an estimated 730mln barrels of oil equivalent prospective resources.

Providence is formally launching the farm-out process today at the Atlantic Ireland conference in Dublin.

John O'Sullivan, Providence technical director, said: "Following the recent closure of the 2015 Irish Atlantic Margin bidding round, which attracted record industry interest, this divestment process represents an excellent opportunity for a third party to acquire a material, non-operated equity stake in a large Irish offshore project with near term appraisal drilling, combined with further appraisal and exploration upside.

The company highlighted that the proposed drill programme at Spanish Point is expected to benefit from a sharp reduction in rig costs, which is the result of impacts on the sector following the decline in oil prices.

A well in 1981 encountered a series of stacked over-pressured reservoirs at Spanish Point.

Back then, the well yielded a flow rate of 4.85mln cubic feet of gas and 925 barrels of oil per day.

Studies by Cairn have subsequently indicated that a modern well could have flows in excess of 10,000 barrels oil equivalent per day.

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on 09/21/2015