Oil stake may earn Providence $10bn

Cash flows of up to $10.6bn (€8bn) could be generated by Providence Resources’ 80% stake in the Barryroe oil field in the Celtic Sea, according to fresh estimates.

The figures come from industry consultant, Netherland Sewell & Associates (NSAI) and act as a financial follow-up to the same company’s April audit of Barryroe, which showed that the Basal Wealden reservoir — one of four at the field — holds recoverable resources of 266m barrels of oil. The financial audit suggests that cash flow could be just over $2.7bn, in the worst case scenario.

Providence — which suffered a setback, earlier this week, with the news that initial drilling at the Dunquin prospect off the west coast found no commercial hydrocarbons — is set to halve its Barryroe stake, later this year, through the anticipated farming out of around 40% to a new, as yet unnamed, strategic partner. That move, analysts suggested yesterday, will illustrate Barryroe’s true value.

April’s reserve audit was the second carried out at Barryroe and — added to one conducted at the Middle Wealden block — means that the field (even before the final two reservoirs are measured) holds potential recoverable resources of nearly 350m barrels of oil equivalent.

Elsewhere, yesterday, Limerick-headquartered explorer, Circle Oil announced that it has bought a 30% stake — with the option to increase that to 50% — in the Beni Khaled production licence in Tunisia. Circle will share the licences with its partner, Exxoil SA. The Limerick company will spend an expected $5m on a 3D seismic programme and drilling of one well, in return for its stake.


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