Cork looks set to become Ireland's richest region
Providence Resources will seek a €1bn team-up with a major oil company to deliver the black gold find it announced at its Barryroe site last week.
"We're certainly talking €1bn -- and then several billions over the field life," chief executive Tony O'Reilly Jnr told the Sunday Independent.
On Wednesday last, Providence announced that it expects to find up to 1.6 billion barrels -- four times' earlier estimates -- at the site off the Cork coast, which now looks set to rival the North Sea's most bountiful resources.
"This involves big capital expenditure, with billions being invested, so the partner we team with won't be a small company. It will be a major industry player," he added.
He pointed to recent industry dealmakers like Sinopec, which paid €1.2bn for a North Sea stake in Talisman; Cove Energy buyer PTT Exploration and Production; and Chinese giant CNOOC, which has invaded the North Sea, coughing up €12bn for Nexen.
Other potentials are Repsol, ENI or ExxonMobil, which have all teamed with Providence before.
"Some of the larger North Sea players, but also international players -- I'm talking to everybody," O'Reilly said. "We had overtures from big North Sea operators that wanted to meet with us and we pushed them away several months ago because we didn't know what we had at that stage -- we only had pre-flow tests."
Providence has already put €500m behind its drilling at the site. It will now start to reduce its 80 per cent stake in Barryroe to possibly 40 per cent in order to get in an investing partner that will develop the oil.
"This is a big oil resource by world standards," said O'Reilly. "Plus it's not Kurdistan or Sudan, you're not going to get shot. It's a nice place to do business, and it's not the tundra. That already attracts players in the offshore arena. And Ireland also has an attractive fiscal regime."
While Providence put recovery rates for Barryroe (that is the amount of oil that can be delivered from the site) at 16 per cent, some analysts suggest it could be more like 40 per cent. "I think some analysts' views on this are pretty well thought through and reasoned," O'Reilly said.
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This could all be a big deal for Cork's local economy.
"There's already incredibly impressive infrastructure there and using Aberdeen as a reference point, this could make Cork the richest area in this country in employment and revenue," O'Reilly said.
While all the fuss this week has been about the Barryroe site, analysts also suggested that two of Providence's other interests could be equally lucrative. "Spanish Point and Dunquin could be as promising as Barryroe," O'Reilly said. "They were always the more promising wells."
Valued on the ISEQ at €535m, Providence's major shareholders are the O'Reilly family, which has a 15.47 per cent stake; fund manager BlackRock owning 12.82 per cent; JP Morgan with 8.28 per cent; and Henderson Global, which holds 3.88 per cent.
Providence's share price, at €8.40 on Friday, has risen by 70 per cent this year.