This article is from page 10 of the 2008-08-19 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 10 JPG
THE prospect of exploiting a huge gas and oil reserve off the Clare coast moved a step closer this week with the news that Providence Resources has brought in a new partner to work on the Spanish Point field.
This brings the project to it’s next stage of development and it now looks likely that commercial drilling will begin at the site in the next two years.
Providence Resources, which is fronted by Tony O’Reilly Jnr, last week signed a staged farm-out agree- ment with Chrysaor Holdings, which will carry out a 3-D seismic apprais- al work programme of the Spanish Point Field in return for an initial 30 per cent interest in the gas and oil.
The Spanish Point Field is located some 200 kilometres off the Clare
coast in an area known as the Porcu- pine Basin. Providence also owns the exploration right for it’s sister field, known as the Burren, also located in the Porcupine Basin.
Independent studies of the Spanish Point field show recoverable volumes of gas ranging from between 293 and 527 million barrels of oil equivalent (MMBOE). Even the lowest estimate from the field would be enough to fill Ireland’s entire demand for natural gas for decades.
Chrysaor is a privately owned ex- ploration and production company backed by the commodities invest- ment team of Barclays Capital and Natural Gas Partners.
According to details released by Providence last week, Chrysaor has the option to earn up to a maximum 70 per cent interest in the event that two wells are subsequently drilled on
Spanish Point.
Depending on the results of the 3-D seismic programme, Chrysaor may then undertake to finance the drilling of up to two appraisal wells where it will commit not less than 60 per cent cost share.
This proposed farm-out deal be- tween Providence and Chrysaor is subject to the approval of the Irish Government.
Tony O’Reilly Jnr, chief executive of Providence, said the agreement was significant, especially from a shareholder’s perspective as it was a very cost-effective way of advancing a project.
“Having carried out the necessary pre-development work, it is very ex- citing that the partnership has now been able to partner with Chrysaor to advance this large project to the next exciting stage,” he said last week.