Providence's Barryroe Oil Update Could Tempt Majors to Celtic Sea

Irish explorer Providence Resources announced Wednesday that there could be an additional 1.1 billion barrels of oil in place at its Barryroe discovery in the Celtic Sea off the south coast of Ireland.

Oil sector analysts welcomed the news, with one implying that independent and major oil firms might now be attracted to regional exploration and production in the Celtic Sea.

Providence had previously issued estimates suggesting a 50-percent likelihood of there being more than one billion barrels of oil in place at the Middle Wealden and Basal Wealden reservoir zones of Barryroe, and a 10-percent chance of 1.6 billion barrels being in place there.

On Wednesday, the firm said that it had completed an evaluation of the in-place volumetric resource for the hydrocarbon-bearing Lower Wealden and Purbeckian sands. This assessment, based on previous well data and 2D and 3D seismic data, estimates an additional P50 oil-in-place resource of 778 million barrels and a P10 resource of more than 1.1 billion barrels.

"It is clear that more data are required over these intervals, however, the numbers are potentially material and provide room for significant resource growth in the Barryroe project in the longer term," Providence Technical Director John O'Sullivan said in a statement.

Analysts who follow Providence Resources were encouraged by the news.

Will Dymott of London-based Cenkos Securities noted that the additional oil in place is an example of incremental resource potential in the basin, both laterally as well as vertically.

"The studies outlined to date have been extremely encouraging and suggests that a development concept involving horizontal wells has the potential to deliver significant oil production rates at Barryroe. Given the size of the field and assuming a 25 year life, daily production peaking at over 100,000 [barrels of oil per day] is a real possibility," Dymott wrote in a research note in response to Providence's announcement.

Job Langbroek of Dublin-based Davy Stockbrokers stated in his own research note that the news would be "especially interesting to potential industry participants looking for a regional, as opposed to project-specific, level of involvement".

Langbroek added: "In a sense, it should not be that surprising in that a prolific regional source in the Purbeckian is [juxtaposed] directly under plentiful sand packages in the overlying Wealden. It also suggests that Barryroe will not be the only development of Purbeckian oil in the Celtic Sea."