Providence Acquires Stake in West Lennox Discovery
Providence, as part of an international consortium, it has acquired a 10% interest in the West Lennox discovery and the adjoining Crosby exploration prospect, both located in proven hydrocarbon producing areas in the Liverpool Bay area, offshore UK. The Company can also confirm that appraisal drilling commenced on theWest Lennox discovery yesterday.
The West Lennox field is an un-appraised oil discovery located in Block UK110/14c which lies in 15 meters of water off the coast of Liverpool. A discovery well, which was drilled in 1990, encountered a 25 ft oil column in massive reservoir sandstones of the Lower Triassic Sherwood Sandstone Group. These reservoir sands are presently producing 20,000 BOPD at the BHP-Billiton operated Lennox oilfield located just 3km to the east in block UK110/15a. Mapping suggests that the West Lennox and Lennox oil fields may be in communication, which would provide some considerable volumetric upside to the project. Estimates of recoverable reserves range from a base of 1.6 MMBOE to + 3 MMBOE.
The Noble Lynda Bossler jackup (contracted through ADTI) commenced drilling operations yesterday. Providence's share of the appraisal drilling is budgeted at approximately €750,000.
Following the successful completion of the well a fast-track development program involving a single well tieback to the Lennox platform is envisaged as the most likely plan of development. The partners who include, Challenger Minerals (North Sea) Limited, P/F Atlantic Petroleum, DYAS UK Limited and First Oil EXPRO Limited would like to achieve first oil from the West Lennox field at the end of Q3 2006.
In addition to West Lennox, the consortium has also acquired an interest in neighboring block UK110/14d, which contains the highly prospective Crosby oil/gas prospect (potential recoverable reserves 15 MMBOE). The partners plan to evaluate the most recent 3D seismic data over this structure as a prelude to any drilling activity.
Commenting on the announcement, Mr. Tony O'Reilly Jnr., Chief Executive said:
"This is a very attractive investment for Providence. West Lennox represents the first step in our stated strategy of increasing daily oil production. At a time of rising commodity prices, this will allow us to explore other real value added opportunities already within our portfolio. This new presence in the East Irish Sea Basin compliments our other activities in the Irish Sea area, so leveraging our exploration potential."
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