Irish-owned firm in $40m deal for Kinsale gas field

Gas company Eirgas is to buy 40% of the Kinsale Head gas field in Co Cork, it has been announced.

The deal includes the South West Kinsale and Ballycotton gas fields and the country’s only gas storage facility off Kinsale.

The deal will give the company, owned by Providence, a company in which newspaper owner Dr Tony O’Reilly has a 40% share, an 86.5% interest in the gas producing Seven Heads field.

The agreement to make the purchase within three months of today’s date is with the Malaysian government owned Petronas Exploration, listed by Fortune in its top 500 companies in the world.

Providence chief executive Tony O’Reilly said the move would see its daily production rate double to more than 4,000 barrels of oil equivalent per day. It would also gain access to existing and new gas storage and trading opportunities. The deal would give them exposure to the technical resources of Malaysia’s Petronas, one of the world’s largest oil and gas companies.

Additionally, the deal would also give Eirgas an opportunity to potentially monetise gas from some of Providence’s adjacent gas discoveries in the Celtic Sea, as well as from third party fields, he added.

Eirgas was established recently by Providence to invest in gas production, storage and trading opportunities offshore Ireland and in the UK.

Initial indicative valuations showed that for $40m (€28.8m) Providence could acquire a diversification to its portfolio to a value of US$144m pre-funding or the current market capitalisation of the company.

The Kinsale assets include producing fields, gas storage operations, two offshore production platforms and onshore processing facilities and associated pipelines.

Article courtesy of The Evening Echo newspaper.