The main focus is to advance the appraisal of the Barryroe field, to answer key uncertainties about the reservoir and bring the project closer to development.
Presently, Providence has sufficient working capital to last until late March or early April, and, new funding options are now being explored.
“With the farm-out process continuing the company confirms that additional funds will be required to provide sufficient working capital to support the business in the near term and the board is currently considering its funding options,” Providence said in a stock market statement.
Barryroe appraisal plans
The prior Chinese farm-out and development plan was centred on the project’s oil potential, but, according to Thursday’s statement, Barryroe also has a meaningful gas element – which may have strategic implications for the company, Ireland and the government.
Providence today noted that in the past Barryroe has been independently verified as containing large volumes of both gas and oil.
The appraisal plan now being drawn up by the company, potentially comprising two wells, is intended to confirm Barryroe as either (a) a large oil field with a gas cap or (b) a large gas field surrounded by an oil rim.
It is anticipated that the programme would also seek to confirm reservoir continuity and potentially explore a previously untested Jurassic age prospect deeper beneath the Barryroe reservoirs.
Independent estimates indicate a mid-case for recoverable hydrocarbons at 346mln barrels oil equivalent, the company noted.
Providence also said it would consider a possible nearby infrastructure redevelopment project, that could potentially deliver a carbon dioxide storage solution - utilising depleted gas fields - which would “minimise the carbon footprint of a Barryroe development”.
Beyond Barryroe, Providence’s new management continues to advance a strategic review of the business and its assets. As such all exploration licences are being re-assessed based on cost and relevance to the new business model.
At Dunquin South exploration project partner ENI has decided to exit, and it is Providence’s view that the reservoir is less likely to be breached than the Dunquin North structure, which was the subject of an unsuccessful well back in 2013. Providence intends to launch a farm-out process to seek a new partner once ENI’s exit is complete.
The company has, however, confirmed that it is in the process to voluntary surrender the Diablo exploration project.
Chinese deal being unwound, new farm out underway
Providence also confirmed today that its subsidiary Exola DAC has now notified APEC, the Chinese consortium, that it has begun the regulatory process required to transfer the 50% equity in Barryroe back to the original Barryroe partners, Providence and Lansdowne Oil & Gas Plc (LON:LOGP).
Providence will retain 80% whilst LOGP will again hold 20%.
The new farm-out process is being conducted and Providence noted that, with the inclusion of gas into the development approach, several additional companies not included within the initial process have expressed interest in the project and have been invited into the ‘data room’.
Investors will now await any details of funding, farm-outs and/or further appraisal plans for Barryroe.