Providence to buy share in Kinsale Head asset

PROVIDENCE Resources is set to enter the lucrative gas storage and trading market and double its daily oil production levels after winning an option to buy a significant share in part of the former Irish assets of international exploration company, Marathon Oil.

The option in question is for a 40% stake in the Kinsale Head asset – which includes the Kinsale Head, South-West Kinsale and Ballycotton gas fields – and a 40% interest in the gas-producing Seven Heads field. The company is to pay up to $40m (€29m) for both stakes which are owned by Labuan Energy – a subsidiary of Petronas International. Petronas owns 100% of the Kinsale Head asset and 86.5% of Seven Heads.

Petronas bought Marathon’s Irish assets earlier this year, for $180m. The likes of Providence, Island Oil & Gas and Bord Gáis were amongst the domestic companies showing interest in Marathon’s Irish assets, when they were put up for sale. Providence’s buying of the British-based Singleton well from Star Energy (which was subsequently acquired by Petronas) and the pair’s mutual intent to get involved in the area of gas storage in Ireland, actually opened the door to the Irish company being awarded the option.