Frontier Exploration Licence 2/19
The Company currently holds a 40% working interest in FEL 2/19 with Total acting as operator. The working interests in FEL 2/19 are Total (50%), Providence (40%) and Sosina (10%). The licence lies in the southern Porcupine Basin, c. 150 km off the west coast and in c. 1,300 m water depth.
In 2016, the Company (80%) and its partner Sosina (20%) were awarded Licensing Option 16/27 over a 1,324 km2 area. The Licensing Option lies directly adjacent to and north of FEL 3/04 which contains the 600 MMBO Dunquin North residual oil accumulation and the Dunquin South exploration prospect.
During regional interpretation and mapping of vintage 2D seismic reflection data, Providence identified an areally extensive (c. 550 km2) north-south orientated Paleocene basin-floor channel and fan system (‘Avalon’) within the axial part of the Porcupine Basin. The Avalon system, which is located c. 2,500 m BML, is interpreted to be sourced from the north of the basin and shales out in a southerly distal direction. A structural flexure down to the north negates the requirement for sandstone pinch out in the proximal sediment transport direction, greatly improving reservoir sealing potential. The presence of a thick sandstone interval is indicated by compactional drape morphologies which are imaged within parts of the system. The pre-existing Mesozoic structural grain appears to have exerted some control on deposition as evidenced by thickening of the system within pre-existing structural lows. Whilst limited seismic reflection gather data were available during the evaluation phase, the available data suggest the potential for a depth-conformant amplitude versus offset (AVO) anomaly.
In June 2017, the Company agreed a farm-out with Total. In consideration for Total taking a 50% working interest in LO 16/27, Total agreed to pay:
• Pay its pro-rata share of past gross costs of c. US$0.175 million
• In addition to its pro-rata share, pay 21.4% of the past and future costs during the 2-year term of LO 16/27, subject to a gross cost cap of US$1.33 million
Under the terms of the Farm-out Agreement, and subject to Ministerial approval, Total would assume operatorship of LO 16/27 and any subsequent licensing authorisations issued.
In the event that the JV partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, Total will pay 60% of the drilling costs, subject to a gross well cap of US$42 million.
With ministerial approval being granted for the farm-out to Total, the JV partnership elected to progress the LO 16/27 to Frontier Exploration Licence status and an application has been submitted to the Irish government.
On February 1, 2019 the Minister of State at the Department of Communications, Climate Action and Environment has approved for the JV partners to convert LO 16/27 to FEL 2/19.