Monday, December 9, 2019

Providence to Operate Avalon as Total Exits

November 28, 2019

Image: Providence Resources

As Total E&P Ireland, a subsidiary of the French multinational oil giant, has withdrawn, Providence Resources has taken over operatorship of the Frontier Exploration Licence (FEL) 2/19, which contains the Avalon prospect, located offshore Ireland.

FEL 2/19 is located in the southern Porcupine Basin, offshore Ireland and contains the undrilled Paleocene “Avalon” exploration prospect. FEL2/19 lies adjacent to FEL3/04 in which Providence also has an interest.

Total had agreed a farm-out with the Irish oil and gas exploration company in 2017, with the French group taking a 50%  increase in the prospect. Under the terms of the 2017 deal, Total would have paid 60% of any drilling costs, subject to a gross well cap of $42m.

According to company sources, Providence and its partner Sosina have now been assigned Total’s equity in the license.

As a result, the revised equity in FEL 2/19 was now Providence as the operator with 80%, and Sosina Exploration at 20%.

Tony O’Reilly, Chief Executive at Providence, said: “We are obviously sad to see TOTAL withdraw from the Irish sector in general and Avalon specifically as they have been an excellent partner over the past few years.  TOTAL did some great technical work as Operator of FEL 2/19 where the JV recently acquired new 3D seismic data."

He added: "Providence and Sosina will now continue with the evaluation of this data in conjunction with a new farm-out process to bring in a suitable industry partner to assist in a future drill decision for the Avalon prospect.”

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