Providence acquires majority stake in Singleton oil field

Providence, the IEX-listed oil and gas exploration and production company, today announced that it has reached conditional agreement with Star Energy Group PLC (STAR) to acquire its 79.125% share in the producing Singleton Oil Field, onshore UK.

Subject to regulatory approval and contract, Providence’s interest in the Singleton Oil Field will therefore increase from 20% to 99.125%. The remaining 0.875% of the field is owned by Noble Resources.

The principal terms of the proposed transaction are as follows:

- A total cash consideration of US $22m (€16.5m).

- Star and Providence agree a 50:50 JV on a proposed CNG (Compressed Natural Gas) Project at the Singleton site to capture the economic value of associated gas production.

-Star to be given a first option to utilise the Singleton Oil Field for Gas Storage purposes in the future, working with Providence on a 50:50 basis.

-Providence and Star agree to work together on future gas storage opportunities in the Republic of Ireland, again on a 50:50 basis.

Commenting on the proposed transaction, Tony O’Reilly Jnr, Chief Executive of Providence Resources Plc, said: "This is a pivotal transaction for Providence as it allows us the opportunity to substantially increase our daily oil production to approximately 600 BOPD (circa. 219,000 barrels per annum). This will ensure a solid operating cash flow on which to build our operations.

"Having owned 20% of Singleton for over 15 years, we are very comfortable with its operational parameters as well as its geological opportunities and we see upside in both these areas going forward.

"We are also very pleased to continue working with Star Energy, both on the CNG Project at Singleton as well as agreeing to work together on gas storage opportunities in Ireland."