The block is situated about 30 kilometres off the south coast of Ireland in about 100 metres of water. The group says the well could have a potential to produce 300 million barrels of oil.
Though technically challenging, the Baltimore oil accumulation deserves further review given the current sustained higher oil pricing environment.
Heavy, or unconventional, oil creates recovery problems for companies due to the fact that it does not flow as easily, because of its higher density. But rising oil prices has put fresh focus on potential reserves that wouldn’t have been as commercially attractive when oil and gas resources were more plentiful.
Rising oil demand and falling conventional reserves make heavy oil more attractive.
Providence chief executive, Tony O’Reilly, said heavy oil represents a new focus for Providence.
The analysis on the well will be carried out by Exola. Exola is a SPV (special purpose vehicle) established by Providence to invest in heavy and unconventional oil opportunities offshore Ireland and Britain. Exola is an Irish company wholly owned by Providence.
“We look forward to updating our shareholders on what we believe could prove a very exciting and valuable addition to our growing business portfolio,” Mr O’Reilly said.