Providence buys majority share in English oil field for €16.4m

DUBLIN-BASED oil and gas exploration company, Providence Resources, has purchased a majority share in the potentially lucrative Singleton Oil Field in the south of England for $22 million (€16.4m).

The company, headed up by Tony O’Reilly Jr, already owned a 20% stake in the onshore oil field but has now acquired the 79.1% majority share owned by the field’s operator, Star Energy Group.

The purchase means Providence now controls just over 99% of Singleton, with the remainder controlled by Oklahoma-based, Noble Resources.

Yesterday, Mr O’Reilly called the move “a pivotal transaction” for Providence.

“It allows us the opportunity to substantially increase our daily oil production to approximately 600 bopd (barrels of oil per day) or around 219,000 barrels per year. This will ensure a solid operating cash flow on which to build our operations.”

Star Energy chief executive Roland Wessel said: “The sale of our stake in Singleton underlines our strategy to focus on building a significant multi-site gas storage business. Singleton is a valuable, producing asset but, with limited gas storage potential, it was no longer core to our business. The proceeds will be reinvested in pursuit of our gas storage strategy.

“Having worked with Providence for many years at Singleton, we look forward to working with them in developing gas storage opportunities in Ireland, where we believe there are many suitable structures.”

The two companies have also agreed a 50-50 joint venture on a proposed compressed natural gas (CNG) project at Singleton to capture the economic value of associated gas production. Star will be given first option rights to utilise the Singleton field for gas storage purposes. The two companies have also agreed to work together on future gas storage opportunities in Ireland, which again will be run on a 50-50 basis.