Providence namesUK firm as licence option partner
OIL and gas explorer Providence Resources has granted a UK energy company an option on a licence off south-east Ireland.
The Irish company, which is focused primarily on offshore sites around this island, said yesterday it had given the Petronas-owned Star Energy an option on half of the SEL1/07 licence, also known as 'Dragon', in the St George's Channel Basin about 40km off the Wexford coast.
The licence is situated at a depth of around 90 metres. Providence said the licence contains the mapped extension of the UK Dragon gas discovery into Irish waters, as well as the deeper 'Orpheus' and 'Pegasus' exploration prospects.
"The option agreement provides for Star to acquire a non-operated 50pc interest in the licence in return for carrying out a number of subsurface studies on the Dragon gas discovery," the company added.
Under the deal, Star -- the UK's second largest onshore oil producer -- will participate in the drilling of the planned appraisal and development well if it exercises the option.
Drilling remains subject to government approval but that is not expected to be an issue. Terms of the deal were not released.
"Providence's strategy is to bring all the major targets offshore into its portfolio, thereby giving shareholders an opportunity to participate in what is one of the most underexplored and lowest density drilling areas in northwestern Europe," said Davy analyst Job Langbroek.