Sites off west coast have potential to produce 2bn barrels

Two companies have identified oil targets off the west coast, with the combined potential to produce nearly two billion barrels of oil.

The John Teeling-chaired Petrel Resources announced yesterday that it has identified a target in the south Porcupine Basin, with the potential to produce one billion barrels of recoverable oil — a development which boosted the company’s share price by 354% yesterday.

Separately, Providence Resources — which recently said that its Barryroe field in the Celtic Sea could contain 280 million barrels — has said that seismic surveys of its Drombeg oil prospect, also in the southern Porcupine Basin, have indicated recoverable potential of around 872 million barrels from an oil-in-place volume of nearly three billion barrels.

Providence presented its Drombeg studies at yesterday’s Atlantic Ireland Conference in Dublin. The company controls 80% of the prospect — situated 60km from the high-potential Dunquin prospect due to be drilled early next year — with London-based explorer Sosina controlling the remainder. The company ultimately plans to farm down part of its interest in order to cover the costs of drilling a well.

Petrel’s find is located at a licensing option currently 100% controlled by the company. It has until next October to exercise its option to move forward to exploration well level. The company is currently in the early stages of trying to identify a development partner, but has described suggestions of a drill date of 2014 as “optimistic”.

According to Petrel managing director David Horgan: “We have long known that Ireland’s offshore Porcupine Basin is a hydrocarbon province. There are established petroleum systems, reservoir sands, and possible traps at several levels.

“Our recent work has identified a number of high-potential prospects, a least one of which we believe has a billion barrel potential.”

Petrel’s AIM-listed share price jumped from 6p to 27.25p on the back of yesterday’s news.

Elsewhere, Dublin-headquartered San Leon Energy yesterday announced a share-based takeover of London-based Aurelian Oil & Gas, valuing the latter at £61.6m (€77m). The Irish company will control 66% of the merged entity, which will become the biggest non-domestic player in the Polish exploration market. The companies said the new group has the potential to be a leading exploration and production company across Europe and North Africa.

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