Such a move would come a month before the close of the Government’s Atlantic Margin licensing round, aimed at boosting exploration interest in waters off the west coast. It would also mark the first time any drilling work has commenced in Irish waters for two years; Providence Resources/ExxonMobil’s failed Dunquin North project being the last in 2013. Lansdowne’s activity will also mark the first drilling work in the Celtic Sea since work carried out at the highly anticipated Barryroe field in 2011/2012. Drilling at Providence Resources’ Spanish Point asset had been expected to restart activity in the Irish offshore arena this year, but that project has been postponed until sometime next year.
Lansdowne – the junior partner at Barryroe – yesterday announced that drilling is expected to start at its Midleton prospect in the northern Celtic Sea in August. The Dublin-headquartered company holds a 20% stake in the asset, with Kinsale Energy (the Irish subsidiary of Malaysian explorer, Petronas) the operator and 80% majority stakeholder. Lansdowne’s share price jumped by 20% yesterday, on the back of the news.
Kinsale Energy will fund 100% of the drilling costs at Midleton and a contract with Diamond Offshore Drilling (UK) has been signed for use of the Ocean Guardian drilling rig.
“We are pleased with the rapid progress Kinsale Energy has made since taking over as operator and look forward to the drilling of the Midleton well later this year,” Lansdowne’s chief executive, Steve Boldy commented.
The Midleton prospect is estimated to contain 330 billion cubic feet of gas in place, 268bn of which is deemed recoverable. Last month, AIM-listed Lansdowne reported a 32% widening in annual operating losses to £1.3m (€1.8m). The company is currently undergoing a strategic review of its business; which is looking at every available option from a farm-down, or sale of certain assets to a merger or a complete sale of the company.
“The news that a well will be drilled this summer... is positive for Lansdowne, bringing welcome activity and additional options to its current strategic review,” said Job Langbroek of Davy Stockbrokers.
He added: “The well and arrival of a rig is good news, generally, although the rig is unlikely to drill any other wells this year and, as far as we are aware, there are no drill-ready targets elsewhere that fit into the timetable. Nonetheless, the drilling of a good gas target is progress.”