The Dunquin North exploration well was found to be mainly water-based, with no commercially recoverable hydrocarbons contained.
However, the Dublin-based exploration firm — which has a 16% stake in the Dunquin field — has put a positive spin on things, saying the finding de-risks the entire South Porcupine Basin and shows the potential of the adjacent Dunquin South well.
Initial drilling also found evidence of a possible residual oil column, suggesting better news lies elsewhere in the Dunquin prospect and further afield in the Porcupine Basin
Providence chief executive Tony O’Reilly jr said the findings provide “hard data” on the area for the first time and mean that the Dunquin dream remains “alive and well”.
He said Dunquin North has demonstrated “all of the key components of a working petroleum system exist in the southern Porcupine Basin”.
“These data are encouraging not just for the adjacent Dunquin South prospect, but also for the basin in general, and are likely to intensify the already growing industry focus on this emerging hydrocarbon exploration arena.”
ExxonMobil — which acts as operator at Dunquin, and owns a 25.5% stake — was more downbeat. “This project had a higher level of risk and a higher reward, which unfortunately was unsuccessful. This result underlines the uncertain nature of deepwater exploration,” said Exxon’s European exploration director, Kevin Biddle.
Analysts seemed more positive. Job Langbroek said the results will be initially viewed as disappointing, but the potential presence of oil “significantly de-risks” the basin and “bodes well for Providence’s other prospects in the region”.
London-based Liberum Capital seconded that opinion and said long-term investor attention should now turn to Providence’s Barryroe farm-out deal.
The immediate result yesterday, however, was a near 9.5% drop in Providence’s share price — down nearly 30% since the start of the year — to €5.55.