Standard Exploration Licence 1/11
The Company holds an 80% working interest (through its wholly owned subsidiary, Exola DAC) in SEL 1/11 which contains the Barryroe oil field. The licence is located in the North Celtic Sea Basin, offshore southern Ireland and is adjacent to the PETRONAS operated Kinsale Head gas field. The Company acts as Operator with Lansdowne (20%).
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, the Company 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 was issued by Netherland Sewell & Associates Inc. confirming the Company’s previously published 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 listed in the table below.
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 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.
In July 2017, the Barryroe partners were granted a 2-year extension to the current phase of the Barryroe licence (SEL 1/11) to July 2019 as well as an extension to the term of the 2nd phase to July 2021.
The Company continues commercial discussions with a number of companies, who are currently active in the data room process, and the recent rise in oil prices, combined with the benefits of a lower operating and capital cost base, provide a much better background environment for the Company to conclude commercial matters.
In September 2017, Company confirmed that whilst commercial discussions are ongoing, noting the significant value attributable to Barryroe and prevailing low rates for rigs and associated offshore services, the Company has taken a decision to advance drilling at Barryroe, with planning underway for drilling in H2 2018/H1 2019 (and possibly a side-track).
In August 2017 Providence issued an Expression of Interest (EOI) to the rig market for the provision of an offshore rig for the drilling of a one firm plus one option appraisal well programme on Barryroe (link).
The details on the forward dates for the planned drilling programme will be communicated once the schedule is finalised.
Exclusive Option Agreement, southern portion of OPL1
In December 2015 the Company announced that, through its wholly owned subsidiary, Exola DAC, it had entered into an exclusive option agreement with KEL over the southern portion of OPL 1.
Under the terms of the Option, Exola will have the right to earn a 60.0% working interest in the area relating to the Option through the 100.0% funding and drilling of an exploration well.
The Option is exercisable for a period of 3 years and is at the sole discretion of Exola, with any future assignment of equity in respect of the Option, being subject to the approval of the Irish government.
Providence Resources' Barryroe Oil Field - Oil in Place Resource Update
Providence Resources' Barryroe Oil Discovery
Barryroe Well Testing. March 14th, 2012