Oil find could be twice original estimates

Oil in place at the Barryroe oil field could be twice original estimates and may be closer to two billion barrels, according to the latest analysis by field owner Providence Resources.

And the field could produce as much as 100,000 barrels of oil a day over a 25-year period based on proven estimates alone.

Shares in Providence, which have trebled in value so far this year, rose slightly on the news from the company but stockbroking analysts viewed the latest analysis from Providence’s technical director John O’Sullivan as very positive.

The latest upgrade of the estimates of oil in place at the field are based on fresh seismic data analysis and older limited drill results form deeper reserves.

Mr O’Sullivan said it is clear more data are required but said the numbers are potentially material and provide room for significant resource growth in the Barryroe project in the longer term.

“In the meantime, we look forward to providing shareholders with an update on recovery factors from the dynamic modelling project.”

The field has proven reserves of between 1,043m barrels and 1,612m barrels in its Middle Wealden and Basal Wealden reservoir zones and the latest data indicates that there may be between a 778m barrels and 1,165m barrels more at other deeper levels in the field which will require actual drilling to prove.

London-based Cenkos Securities said that while the final development plan for the field has yet to be agreed the studies outlined to date have been extremely encouraging and suggest that a development concept involving horizontal wells has the potential to deliver significant oil production rates at Barryroe.

“Given the size of the field and assuming a 25-year life, daily production peaking at over 100,000 BOPD is a real possibility,” Cenkos said.

However, just how much of this oil will be recoverable and eventually brought on-shore remains to be determined.

Davy analyst Job Langbroek said: “The news is positive for the stock albeit that the resource identified has a lower technical confidence level than the Basal Wealden in-place resource identified at the end of July. The next news from the Barryroe project is likely to be the recovery factor data for the Basal Wealden which now looks like it will be completed during October.”