Providence Boosts Spanish Point Stake with Chrysaor Acquisition

Irish explorer Providence Resources announced Monday it has boosted its holding in the Spanish Point project, located offshore west of Ireland, after buying Chrysaor E&P Ireland Limited.

Chysaor holds a 26-percent equity interest in the Spanish Point field, which is located within the FEL 2/04 license. The firm also holds 26-percent equity interests in the FEL 4/08 and FEL 1/14 licenses, which along with FEL 2/04 lie within Quadrant 35 in the northern Porcupine Basin. The licenses are all operated by Cairn Energy, which holds a 38-percent interest in them. Providence Resources already holds a 32-percent stake in the licenses.

As part of the deal, Providence has paid $1 and has agreed to make a future, contingent success fee payment of $5 million to Chrysaor Holdings Limited in the event that a final investment decision is made for the Spanish Point discovery.

Providence said that a detailed re-analysis of the original well 35/8-2 (the discovery well) at Spanish Point is now supportive of a stacked reservoir contact scenario with an associated un-risked estimate of hydrocarbons initially in place of 730 million barrels of oil equivalent as well as combined contingent plus prospective recoverable resources of up to 337 million boe. An appraisal well on the Spanish Point discovery is planned to be drilled later this summer.

Meanwhile, Providence also confirmed that it has now reached agreement on commercial terms of a proposed farm-in part for its Barryroe asset, offshore the south coast of Ireland. However, it has not revealed the identity of this partner or the details of any deal being discussed.

Providence CEO Tony O'Reilly commented in a company statement Monday:

"We are pleased to announce the acquisition of [Chrysaor], which has materially increased our equity position in the flagship Spanish Point project. Whilst the project is still at appraisal stage, the recent technical studies have highlighted the upside resource potential at Spanish Point, which, if realized, would confirm the field to be a major hydrocarbon accumulation. Appraisal well planning is continuing with operations expected to commence in Q2 2015. We will provide further updates over the coming period as the operator finalizes rig selection and progresses into the operational phase.

"The agreement of commercial terms for Barryroe is a positive step forward. We continue to work towards the conclusion of a transaction and we look forward to updating shareholders on this and the proposed forward program for Barryroe in due course."

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