Providence commits to drilling at Spanish Point assets of west coast

OIL and gas exploration company Providence Resources has formally committed to drilling next year at its high-profile Spanish Point/Main Porcupine Basin assets off the west coast of Ireland.

This activity will form a significant part of the Tony O’Reilly Jnr-led company’s already publicised and much-anticipated offshore Ireland drilling round for this and next year.

Providence has a 56% stake in the Main Porcupine Basin area, which includes the Spanish Point gas and Burren oil discoveries. It is partnered in the area by Chrysaor E&P Ireland and Sosina Exploration; with the latter companies set to take on much of the drilling costs.

Providence is currently buying drilling rigs for its upcoming round of activity and is likely to begin drilling at Spanish Point around May 2012.

Its 2011 drilling activity will cover the Barryroe and Hook Head assets in the Celtic Sea, Dalkey Island off the east coast and Rathlin off the north-east of Ireland — while its remaining assets, including the highly anticipated Dunquin field in the South Porcupine Basin, will be worked on next year.

The company’s Irish drilling campaign will see a €500m investment in Ireland (Providence investing €120m and the rest coming from its assorted exploration partners) and will count as the largest drilling programme ever carried out in Irish waters.

Yesterday’s announcement — which Mr O’Reilly said should kick-start a “very exciting” couple of years for the company — also included the news that Providence will be acquiring a major new 3D-seismic survey of the Main Porcupine Basin to see how much more opportunity might exist three.

That survey is likely to be acquired this summer.

About 70% of Providence’s assets have already been shown to be proven discoveries.

Meanwhile, yesterday, the Dublin-quoted Middle- Eastern exploration company, Dragon Oil reported a 49% rise in pre-tax profits — to €377.3m).