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SHARES in Providence Resources climbed nearly 5pc in Dublin after the company said it had made discoveries consistent with a large oil or gas discovery at one of its licences in the Atlantic.
The company, which last month revealed details of the potentially huge Barryroe oil field off the Cork coast, said a survey of its Drombeg licence in the Atlantic Margin off the west coast of the country had raised the possibility of another major oil field.
In a technical update, Providence said a seismic survey of the area about 200km south-west of Baltimore in west Cork had discovered a number of "geological anomalies" that indicated the possible presence of large quantities of either oil or gas.
There will now be a number of further tests to be carried out and it will be some time before the discovery is confirmed.
The survey, which was carried out by Ikon Science, is one of the first steps to reconnoitre an area that hasn't been looked at in great detail before.
Drombeg is situated in very deep water that was not suitable for commercial investigation until recently.
Reinforced
It is even further out to sea than Providence's Dunquin licence, which will be drilled next year and had long been the star of the company's portfolio until the scale of Barryroe became clear.
Company technical director John O'Sullivan said the announcement reinforced the strength of the company's portfolio.
"The evidence of potentially active hydrocarbon migration in this frontier basin has wider implications for our other projects in the area, most notably Dunquin, which is to be drilled in 2013.
"Given Drombeg's location and water depth, it is likely that we will seek a capable joint-venture partner with deepwater operating experience, though that view may change with positive results from the upcoming Dunquin well.
"We hope to be in a position to update the market on the prospective oil and gas resource potential of Drombeg during Q4 2012," he added.
Job Langbroek of Davy Stockbrokers said it is still early days for Drombeg but "the scale potential is very large and the optionality that targets like this provide is likely to become increasingly relevant in the market's assessment of Providence".
Providence closed at €7.85. It is up more than 200pc so far this year.
Irish Independent
