Providence Signs Offshore Ireland Farm-out Deals

Providence Resources P.l.c. has signed two farm-out agreements on its Celtic Sea area interests, held under Standard Exploration License 2/07, off the south coast of Ireland. Both farm-outs are subject to approval from the Minister for Communications, Marine and Natural Resources.

The first agreement covers a farm-out of 15% of Celtic Sea Standard Exploration License 2/07 to Dyas BV, a Dutch oil and gas company. Dyas BV is a subsidiary of SHV Holdings NV, a large privately owned Dutch investment holding company.

Providence has also agreed to farm out 10% of Celtic Sea Standard Exploration License 2/07 to Atlantic Petroleum (Ireland) Limited, a subsidiary of P/F Atlantic Petroleum. P/F Atlantic Petroleum is a Faroe Islands-based oil and gas exploration company, listed on both ICEX (Icelandic) & OMX (Copenhagen) stock markets.

This is the first time that both companies have invested in offshore Ireland.

Subject to Irish government approval of these two farm-outs, the equity stake of Providence will reduce to 55% in License 2/07, whilst its most recent farm-in partner, Challenger Minerals (Celtic Sea) Limited, (a subsidiary of GlobalSantaFe Corporation) will retain a 15% interest and Midmar Energy Limited, will retain a 5% stake.

The Celtic Sea License 2/07 contains the following:

  • Ardmore gas discovery
  • Helvick oil field
  • Hook Head oil & gas discovery
  • Dunmore oil discovery

Commenting on the farm-out agreements, Tony O'Reilly Jr., Chief Executive of Providence Resources P.l.c., said:

"We are extremely pleased to have both Atlantic Petroleum and Dyas join us in our Celtic Sea program. As we advance towards drilling offshore Ireland later this year, the addition of these two new partners will further strengthen our Celtic Sea License consortium. We are particularly pleased that both these companies have chosen to work with Providence, as they enter the Irish offshore for the first time.

"Having previously announced that we have secured the Petrolia Rig for drilling, and having assembled this license partnership, we can now focus on finalizing drilling plans, with drilling expected to commence this summer. More details on the 2007 drilling program will be announced within the next few months."

J. Hans Tijssen, Managing Director of Dyas BV said:

"Dyas is excited to be working with Providence on the broad array of assets contained within this License. We are impressed with the portfolio of oil and gas prospects contained within the License and look forward to the commencement of a dedicated drilling program later this year."

Wilhelm Petersen, Chief Executive of P/F Atlantic Petroleum added:

"Atlantic looks forward to the drilling program offshore Ireland this summer. This is our first investment offshore Ireland and so we are particularly pleased to be working with a Company with a huge range of experience and expertise in the region."

Providence's active oil and gas portfolio includes interests in Ireland (offshore), the UK (onshore and offshore), the Gulf of Mexico (USA) and West Africa (offshore Nigeria).

Dyas BV is an active investor in oil and gas exploration, development and production joint ventures, always as a non-operator, with a focus on onshore the Netherlands and the North Sea. The size of Dyas equity in joint ventures ranges from 1 - 50%, and is normally between 10 - 20%. Net 2006 developed oil and gas reserves are some 43 million bbl oil equivalent, split approximately 50/50 in oil and gas, with a daily production level of 17,500 bbl oil equivalent. The company is a 100% subsidiary of the privately owned SHV Holdings NV.

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