Providence Resources confirms Total farm-in
Providence Resources has announced the approval by the Minister of Communications, Climate Action and Environment of the farm-in by Total to the Avalon licence option 16/27.
The licence is located in the southern Porcupine basin off the Irish coast.
The farm-in was originally announced in June this year, and the news confirms the Ministerial approval.
French-giant Total will now operate and hold a 50pc stake in the licence.
Total will pay its share of past costs of approximately $0.175m and a pro-rata of future costs to $1.33m during the licence option term of two years.
In the event that the joint venture partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, Total will pay 60pc of the drilling costs, subject to a gross well cap of $42m.
With the farm-in now completed, the revised equity in LO 16/27 is Total 50pc, Providence 40pc, and Sosina 10pc.
Last month shares in the oil and gas exploration company Providence fell after the company announced it would plug and abandon a deep sea well drilled 220km off the Irish coast.
In a statement, the company said that the 53/6-1 well in the Drombeg Prospect contained water, making it commercially unviable.
The well, drilled from the deepwater drill ship the Stena IceMAX, was the deepest yet in Irish waters, and was sunk in tough offshore conditions.
Fortunately for the Irish company Total had signed an exclusive option for a stake in the well last June, and along with farm-in partner Cairn, will carry much of the cost of the operation.