Providence agrees Celtic Sea farm-out

PROVIDENCE Resources has agreed a further farm-out agreement concerning part of its mining assets in the Celtic Sea off the south coast.

The Dublin-based oil and gas exploration company, which is listed on the IEX market in Dublin and London’s AIM, is farming out an extra 15% of its Celtic Sea Standard Exploration Licence 2/07. Farm-out agreements see exploration companies sell a percentage of equity in their drilling interests in return for another company to cover the day-to-day developmental and operational costs.

This latest 15% is being farmed out to Canadian company, Forest Gate Resources in a move which marks the Toronto Stock Exchange-listed company’s first foray into exploring in Irish waters. The deal is subject to approval from the Department of Communications, Marine and Natural Resources.

If and when it gets the final green light, it will dilute Providence’s share in the licence to 40%. GlobalSantaFe Corporation subsidiary Challenger Minerals currently owns a 15% share in the licence, as does Dyas BV, while 10% is owned by Atlantic Petroleum and Midmar Energy owns a 5% share. The Atlantic and Dyas farm-out agreements were only signed last month.

“Having now fully assembled our licence partnership, we can now focus on finalising our plans for 2007. We anticipate being in a position to announce additional details on this year’s drilling programme within the next few months,” said Providence chief executive Tony O’Reilly Jnr.