Providence Resources P.l.c., the Irish based Oil and Gas Exploration Company, 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.”
