Providence Resources has kicked-off drilling operations offshore Ireland after getting confirming Ministerial consent.
The firm is focusing its efforts on the Druid & Drombeg exploration well in the southern Porcupine Basin, 220 kilometres off the south west coast of Ireland.
The Stena IceMAX drill-ship, one of the largest drilling units rigs in the world firm, will carry out the programme, which is expected to take between 45 and 60 days. The drilling for Druid exploration target, which has a prospective resources of 3.180 billion barrels of oil, and the Drombeg exploration target, which has a prospective resources of 1.915 billion barrels of oil, will be drilled by a single vertical well.
The Stena is on a day rate of $185,000 per day.
In June 2017, Providence agreed a deal giving Total the exclusive right, but not the obligation, to take a 35% working interest in FEL 2/14, by way of a farm-in which can only be declared after the completion of the 53/6-A exploration well.
Total is paying Providence and Sosina $27million in two installments, of which $20.25million was paid on June 20, 2017 with the balance of $6.75million payable three days after the issuance of the P&A notice for the 53/6-A exploration well.
In the event that Total exercises the Option, Providence, Sosina and TOTAL will execute an agreed form Farm-in Agreement whereby Total will assume a 35% working interest and operatorship in FEL 2/14. On that basis, the revised equity ownership in FEL 2/14 would be Total (35%), Capricorn (30%), Providence (28%) and Sosina (7%).
As a result of the Capricorn Farm-in, and the cash proceeds from the Total Option, Providence & Sosina have no cost exposure to the drilling of the 53/6-A well up to a gross well cost cap of $42million.