Tuesday, February 28, 2012
Exploration company Providence Resources expects to become the first company to make a commercial oil find in Irish waters on foot of better than expected drilling results at its Barryroe well off the West Cork coast.
With at least 59 million barrels of recoverable oil in the (fifth) Barryroe well, and with global oil prices consistently above $100 a barrel, the well could be producing oil for public usage within the next two years.
Providence chief executive Tony O’Reilly Jnr said that the implications for the Irish economy are considerable.
Providence’s share price soared by 20%-25% during yesterday’s trading on the Irish and London Stock Exchanges.
Providence said its tests were "extremely encouraging" and confirm high quality light oil, within an oil-prone sandstone source rock.
Tony O’Reilly Jnr said: "The reservoir’s potential could be even better than we thought.
"There is no point in us overselling it right now.
"We will be doing flow tests within the next 10 days to see if the oil can be produced at 1,800 barrels a day, which is the commercialisation target we are working with at this stage.
"We have geologically confirmed the values, and that is already very positive," he said.
"This will be a big project, even by North Sea standards.
"If this oil field was in the North Sea, it would have been developed before now," he added.
Originally discovered in the 1970s, the Barryroe field has a 20km strike distance, or a total spatial area of 300sq km.
Technical obstacles, handling costs and the lower price of oil all meant that exploration work has not happened before now.
With new technologies, Providence has been able to add new data, run more in-depth trials and view 3D images of the well.
Investment advisers in Britain and Ireland have all reacted positively to the Barryroe update.
Davy Stockbrokers viewed the drilling results as "uniformly good news for Providence shareholders".
Tony O’Reilly Jnr said: "While our shareholders are paramount in our mind, we also hope that our success will be acatalyst for investment inIreland Inc.
"We have made nosecret that our company has always invested inIreland.
"We think this field can have great ancillary benefits for the Irish economy."
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