|BOARD AND MANAGEMENT|
|2016 Olympic Partnership|
|Ireland & UK|
|RESULTING AND REPORTING|
|NEWS AND EVENTS|
Standard Exploration Licence 1/11 and Licensing Option 12/4
Providence holds an 80.0% equity stake in Standard Exploration Licence (SEL) 1/11 which contains the Barryroe oil field as well as the adjacent Licensing Option 12/4. The licences are located in the North Celtic Sea Basin, offshore southern Ireland and is adjacent to the PETRONAS-operated Kinsale Head gas field. Providence acts as Operator with Lansdowne Oil & Gas Plc holding the remaining 20.0%. In the past, under different operators, five wells were successfully drilled on Barryroe. All of these wells successfully logged hydrocarbon-bearing reservoirs with three successfully flowing oil to surface. In 2011, having acquired new 3D seismic over the field, Providence and Lansdowne drilled a sixth well on this areally extensive field. In March 2012, the Barryroe partners announced the flow rates from this well, results which far exceeded pre-drill expectations with oil rates in excess of 3,500 BOPD from a 7-metre vertical section of reservoir.
Post-well analysis, in conjunction with the new 3D seismic data set, led to a substantial upgrade in the field size to over 1 billion barrels in place (2C). Subsequent work on multiple development concepts, together with detailed engineering studies on recovery factors, led to estimated 2C recoverable resources of over 300 million barrels of oil from the two main tested reservoir intervals.
In April 2013, a Competent Persons Report (“CPR”) was issued by Netherland Sewell & Associates Inc. (NSAI) confirming the previously published Providence figures on the main basal sandstone reservoir. In conjunction with a previous audit carried out by RPS Energy on the overlying secondary Middle Wealden reservoir, the total upgraded resource base at Barryroe is as follows:
TABLE: Total gross audited on-block Barryroe oil resources.
|1C (MMBO)||2C (MMBO)||3C (MMBO)|
|Basal Wealden STOIIP (NSAI)||338||761||1,135|
|Basal Wealden Recoverable (NSAI)||85||266||511|
|Middle Wealden STOIIP (RPS)||31||287||706|
|Middle Wealden Recoverable (RPS)||4||45||113|
|TOTAL RECOVERABLE OIL RESOURCES||89||311||624|
Note: The table above excludes recoverable solution gas (i.e. 207 BCF or 34.5 MMBOE in the 2C case)
Further incremental resource potential has also been identified in logged hydrocarbon bearing intervals within stacked Lower Wealden and Purbeckian sandstones, which the Company estimates contain total associated P90, P50 & P10 in place oil resources of 456 MMBO, 778 MMBO and 1,165 MMBO, respectively. In February 2014, the area of SEL 1/11 was increased by c. 160 km2 to provide for possible extensions of the Barryroe oil field beyond the area previously licensed.
Post the publication of the CPR, Rothschild were appointed advisors and a farm-out process commenced with the objective of bringing in a
suitably qualified company to advance the Barryroe project towards field sanction/ development. Noting the evolving market conditions for capital expenditure reductions, in April 2014, the Company revised the original field development plan to a smaller, staged development programme, building up to full field development (with projected ultimate production rates of up to 100,000 BOPD). The phased development programme targets an initial peak production rate of c. 30,000 BOPD, with substantially reduced initial capital expenditure and an accelerated timeline to get to first oil.
The Company continues discussions with a number of companies who are currently active in the data room process and the recent rise in both oil prices and M&A activity provide a better background environment for the Company to conclude matters. The partners have made an application to extend the current phase of the Barryroe licence (SEL 1/11)in order to facilitate these farm-in discussions. Further announcements regarding Barryroe will be issued in due course as appropriate.