Irish oil explorer Providence Resources is selling its UK onshore assets in a £41million deal to concentrate on offshore exploration.
The assets – production, development and exploration acreage in southern England – will be taken over by onshore oil and gas firm IGas Energy.
Providence said: “The divestment of these UK onshore assets further facilitates Providence in its primary corporate objective of completing the largest ever concerted drilling programme offshore Ireland.”
It would also made the firm debt free, the firm added.
Providence recently announced that it’s Barryroe discovery, 20% owned by Westhill-based explorer Landsdowne Oil and Gas, could have more than a billion barrels of oil in place.
In today’s deal, IGas will take Providence’s 100% interest in the Singleton oilfield and its 50% operated interest in licence PEDL 233, which includes the Baxter’s Copse oil discovery and Burton Down exploration prospect, both in West Sussex.
IGas Energy chief executive Andrew Austin said: “The Singleton field lies between our existing Storrington and Horndean fields in the Weald Basin.
“We currently sell all the oil produced at Singleton on behalf of Providence and have a very good understanding of the field given its history.
“We see considerable upside from the field alongside the additional resources in Baxter’s Copse.”
Current production from Singleton is 530 barrels of oil per day, said IGas.
According to estimates, the field has 5.3million 2P reserves and production for 2013 is estimated to be 485bopd.
Providence chief executive Tony O’Reilly said: “We are pleased to announce this transaction with IGas, which comes at an opportune time…given our recent success with the Barryroe well offshore Ireland.
“Providence has held an interest in the Singleton field since the inception of the company.
“Whilst the asset has performed well for us over the years, it has become less of a focus following our recent Irish drilling success, together with the significant exploration and appraisal drilling activities, which are planned for 2013 and beyond.
“The cash received will allow us to be debt free and will provide incremental working capital for drilling and overheads.”