SHARES in Providence Resources jumped yesterday after the explorer said its Barryroe licence had been expanded.
Providence and partner Lansdowne Oil and Gas have been granted an expansion of their exploration licence on Barryroe, the oil discovery off the coast of Cork that Providence discovered last year.
The area has been expanded by 180 square kilometres by the Minister for Communications and Energy, Pat Rabbitte. Recent structural mapping of the field suggested it extends further to the south and southwest, though no wells have been drilled there yet.
The area in question lies about 100m underwater in the North Celtic Sea Basin, 50km off the coast of Cork. Providence has an 80pc stake in the licence to explore it, and is the operator of the site, while Lansdowne has a 20pc interest.
"The granting of an increase recognises the potential significant volumetric upside that exists at Barryroe," said Providence technical director John O'Sullivan.
The company's share price had risen by as much as 10pc by yesterday afternoon on the news, trading at €2.86 at 12.30pm.
Providence must secure a farm-out agreement to finance the site; small exploration firms usually sell off a stake in any oil discoveries to larger firms in return for a share in revenues and not having to fund the development costs.
Its share price slumped in January amid media reports that farm-out talks may not be progressing as planned and that Providence may have to undertake additional appraisal work on the site.
About eight months ago, Providence Resources boss Tony O'Reilly said a successful farm-out of Barryroe could be worth several billion dollars.