UK field significantly richer in oil than predicted -- Providence
PROVIDENCE Resources has said data shows its Baxter's Copse discovery holds much more oil than previously thought.
Providence found a "significantly larger oil accumulation" in the UK oil field close to one of the company's existing fields -- and could begin drilling next year, the company said in a statement yesterday.
The discovery in southern England is near Providence's Singleton field, which produces more than 800 barrels of oil equivalent per day.
Recent technical work carried out on the Baxter's Copse oil field produced an increase in reserve guidance, the company said.
"We are very pleased to report that our work programme on Baxter's Copse has dramatically upgraded the field's reserve potential and accelerated it towards development," said Providence boss Tony O'Reilly.
"The deployment of modern seismic processing technologies has been the key to understanding the potential of the Baxter's Copse discovery and this, together with our recent redevelopment activities at the Singleton field, bode well for the ultimate exploitation of these significant reserves," he added.
Results from the third-party audit concluded that the oil accumulation contained reserves of 5.4 million barrels and may have as much as 15 million barrels.
Providence has a 50pc interest in the onshore Baxter's Copse discovery, which is 5km from the company's Singleton oil field. "Baxter's Copse's close proximity to the developed Singleton oil field would accelerate commercial production if the development well is a success," said Caren Crowley of Davy Stockbrokers.
She added that the broker's risked valuation for Providence is almost four times the current share price.
Last week, Providence said its Dublin Bay Dalkey Island prospect could contain 870 million barrels and that the basin might be suitable for gas storage and carbon sequestration.