Ireland-based oil and gas exploration company Providence Resources has signed an exclusive option agreement with Total E&P Ireland for the frontier exploration licence (FEL) 2/14.
Located in water depths of 2,250m, the southern Porcupine Basin is around 220km off the south-west coast of Ireland. FEL 2/14 hosts the Paleocene ‘Druid’, Lower Cretaceous ‘Drombeg’ and Jurassic ‘Diablo’ exploration prospects.
Providence Resources operates the FEL 2/14 licence with a 56% interest.
The remaining working interest is held by Capricorn Ireland (30%) and Sosina Exploration (14%).
Providence chief executive Tony O’Reilly said: "We are delighted to have agreed this exclusive option with one of the world’s leading E&P companies.
"Should Total subsequently elect to exercise the option and farm-in to FEL 2/14, the JV Partners will have the benefit of being operated by an industry leader in deepwater hydrocarbon exploration and development."
Under the agreement, Total has the option and right to farm-in to a 35% working interest in the licence from Providence and Sosina.
For this interest, the company will make a payment of $21.6m to Providence and $5.4m to Sosina.
Total can exercise this option within 60 business days from completion of plugging and abandoning of the upcoming 53/6-A well.
The well is planned to be drilled this month to target Druid and Drombeg prospects.
If Total decides to exercise the option, all three parties will enter a farm-in agreement to transfer 35% working interest and operatorship in FEL 2/14 to Total.
The agreement is subject to the approval by the Irish Minister of Communications, Climate Action and Environment.