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Providence announces Chrysaor acquisition

09th February 2015

Providence Resources has announced the acquisition of 100 per cent of the issued share capital of Chrysaor Exploration & Production Ireland Limited (CEPIL), and has confirmed that it has now reached agreement on commercial terms with a proposed farminee on its Barryroe asset, offshore Ireland

Providence Resources has announced the acquisition of 100 per cent of the issued share capital of Chrysaor Exploration & Production Ireland Limited (CEPIL), and has confirmed that it has now reached agreement on commercial terms with a proposed farminee on its Barryroe asset, offshore Ireland
CEPIL holds a 26 per cent equity interest in the Spanish Point field, located in FEL 2/04, as well as a 26 per cent equity interest in FEL 4/08 and a 26 per cent equity interest in FEL 1/14 pursuant to an original farm out agreement with Providence in 2008

“We are pleased to announce the acquisition of CEPIL, which has materially increased our equity position in the flagship Spanish Point project,” said Tony O’Reilly, chief executive of Providence.

“Whilst the project is still at appraisal stage, the recent technical studies have highlighted the upside resource potential at Spanish Point, which, if realised, would confirm the field to be a major hydrocarbon accumulation. Appraisal well planning is continuing with operations expected to commence in Q2 2015. We will provide further updates over the coming period as the operator finalises rig selection and progresses into the operational phase.

“The agreement of commercial terms for Barryroe is a positive step forward. We continue to work towards the conclusion of a transaction and we look forward to updating shareholders on this and the proposed forward programme for Barryroe in due course.”

CEPIL holds a 26 per cent equity interest in the Spanish Point field, located in FEL 2/04, as well as a 26 per cent equity interest in FEL 4/08 and a 26 per cent equity interest in FEL 1/14 pursuant to an original farm out agreement with Providence in 2008.

The licences, all located within Quadrant 35 in the northern Porcupine Basin, offshore Ireland, are operated by Cairn Energy PLC (38 per cent), through its wholly owned subsidiary Capricorn Ireland Limited, on behalf of its partners, Providence Resources (32 per cent), CEPIL (26 per cent) and Sosina Exploration (4 per cent). The licences, which cover an area of around 2,000 square kilometres, are located around 175 kilometres off the west coast of Ireland in water depths of about 400 metres, the majority of which is covered by modern, high-quality 3D seismic data.

Under the terms of the acquisition, Providence has acquired the entire issued share capital of CEPIL for a nominal consideration of one US dollar and has agreed to make a future, contingent success fee payment of USD 5.0m to Chrysaor Holdings Limited in the event that a Final Investment Decision is made for the Spanish Point discovery.

As part of the acquisition, Chrysaor CNS Limited (Chrysaor) will take a 15 per cent interest in FEL 1/14, subject to ministerial approval. Following completion of the acquisition, the equity stakes in FEL 2/04 and FEL4/08 are now Capricorn Ireland Limited (38 per cent), Providence (58 per cent) and Sosina Exploration (4 per cent). Subject to ministerial consent, the equity stakes in FEL 1/14 will be Capricorn Ireland Limited (38 per cent), Providence (43 per cent), Chrysaor (15 per cent) and Sosina Exploration (4 per cent).

Providence has received a number of third party expressions of interest in the area, which it will continue to evaluate in the context of maximising value for shareholders.

 

Barryroe Project

In response to continued market speculation, Providence can confirm that it has now reached agreement on commercial terms with a proposed farminee on its Barryroe asset, offshore Ireland. However, as this farm in is subject to closing conditions, most specifically the proposed farminee raising the required level of financing, terms are not being disclosed at this time. Given its conditional nature, shareholders should note that there is no certainty that the farm in will be concluded with the proposed farminee and further announcements will be issued in due course as appropriate.

Providence currently holds an 80 per cent interest in Barryroe, located in SEL 1/11 and LO 12/4 in the North Celtic Sea Basin, offshore Ireland, through its wholly-owned subsidiary, EXOLA Limited, with Lansdowne Oil and Gas Plc (Lansdowne) holding the remaining 20 per cent interest through its wholly-owned subsidiary, Lansdowne Celtic Sea Limited (LCSL).

 

 

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