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."
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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.