Providence's UK arm secures exploration licence off north coast
IRISH exploration firm Providence Resources said its UK subsidiary has been offered an exploration licence off the coast of Northern Ireland.
Providence subsidiary PRO Singleton was offered the licence over six blocks in the Rathlin Basin, off Northern Ireland, by the UK's Department of Energy and Climate Change as part of the UK's latest oil and gas licensing round. Shares in the company closed up 1.7pc at €2.49 in Dublin yesterday.
"The award gives Providence pole position in the Rathlin Basin and forms part of its overall strategy to hold a pre-eminent position in licences offshore Ireland," said Davy Stockbrokers analyst Joe Langbroek.
Providence said the initial licence phase covers six years, and under the terms of the deal a well must be drilled within this period to progress to the next phase. The group will carry out technical studies on the exploration potential and will operate the licence with a 100pc equity interest.
"We are very pleased to have been offered additional offshore acreage in the Rathlin Basin, which in conjunction with the licence secured over Rathlin Island in 2010, gives Providence the leading offshore acreage position in this emerging basin," chief executive Tony O'Reilly said in a statement.
Providence is currently engaged in the biggest ever exploration programme in Irish waters. The three-year drilling programme which will cost €500m hopes to tap gas and oil reserves off the Irish coast.
The latest award "is clearly part of the Providence strategy, which is now focussed on the basins around Ireland," Mr Langbroek said. Providence has sold interests in the Gulf of Mexico and Nigeria to focus on Ireland.
Investors are now waiting for news of drilling at the Barryroe well off Cork. Results are expected soon but may have been delayed by the recent poor weather, the analyst said.