Providence Resources’ exploration off the Cork coast broke the 1,800 barrels per day figure set by the exploration company as being “commercial”.
The Irish Examiner understands that flows of 2,000 barrels of oil per day have been achieved during the test on the appraisal well at Barryroe, 48km off the Cork coast.
If this flow is maintained for the remainder of the test period, then the first oil from an Irish well should arrive on shore by 2014.
Independent analysis suggests that the Barryroe prospect contains 59m barrels of “light but waxy crude oil”.
A well of this size would be regarded as small but commercial and could underpin the future of Whitegate oil refinery.
This is the fifth time oil has been found during explorations of the Barryroe licensing block, but the other wells, drilled in the 1970s and 1990s by Esso and Marathon, fell below the commercialisation target.
A Providence Resources spokeswoman said yesterday: “Flow test operations continue with an update announcement due shortly.”
Providence shares have risen by more than 180% in the last 12 months and closed yesterday at €4.65, up 5.44% on the day.
Just last December Providence increased its equity stake in the Barryroe field to 80% from 50% when it bought out San Leon Energy. Lansdowne Oil and Gas plc holds the remaining 20% and its shares traded up 0.52% yesterday.
Providence chief executive Tony O’Reilly Jr said the implications for the Irish economy of a Barryroe oil find were considerable.
“While our shareholders are paramount in our mind, we also hope that our success will be a catalyst for investment in Ireland Inc.
“We have made no secret that our company has always invested in Ireland. We think this field can have great ancillary benefits for the Irish economy.”
In briefing documents released by Providence when it disclosed its find on Feb 9, the firm outlined what they regard as the implications of a commercial oil find for Ireland.
“With commercial success, the benefits for Ireland include more foreign direct investment, and with no state support or subsidies, and with a tax take double that of other industries — the tax rate for natural resources is 25% — the exchequer will benefit from increased revenues.”
Providence said an oil find would result in more security of energy supply, resulting in new jobs as well as commercial opportunities.
“Importantly, it should also herald a renaissance of the Irish offshore industry, thereby attracting more international investment, which will allow exploration activities which hopefully will lead to more commercial success and will, in turn, allow Ireland to fully exploit its hydrocarbon potential,” Providence said.