Providence Resources set to drill in Porcupine Basin by next June

Providence Resources is eyeing a start date of next June for drilling at its Druid oil prospect in the Porcupine Basin off the south-west coast.

Independent studies have suggested the presence of nearly 5bn barrels of oil, on a combined basis, across Druid and the nearby Drombeg prospect, which is also controlled by Providence.

The Tony O’Reilly Jr-fronted exploration company yesterday said it has opened a tender process for firm to provide the drill rig equipment and expects to have a deal in place before the end of the year.

Providence has an 80% controlling stake in Druid, with London-based Sosina Exploration its 20% junior partner. While a recent $70m (€62m) fundraising, via a share sale, presented Providence the clout to drill at Druid itself (as well as to pay off legacy legal costs and debt), it could still opt to bring on board a development partner.

To that end, the company yesterday said that the farm-out process, launched earlier this year regarding the Porcupine Basin assets has “garnered very good industry interest”.

Speaking in July, after the successful fundraising, Mr O’Reilly said a number of ‘super-majors’ — a term used to describe the biggest eight, or so, oil companies in the world — had shown interest in the Drombeg prospect.

As previously announced, the cost of drilling at Druid is likely to total around $35m — down from previous estimates of $46m. However, an additional $15m may be needed to deepen the well to examine the Drombeg prospect.

“Notwithstanding the fact that it has sufficient funds to complete the Druid well, the possibility of a farmout could allow a deepening or, in the event of very successful farmout, allow the funds to be diverted to other drilling plans in other basins,” said Job Langbroek of Davy Stockbrokers.


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