Providence Resources confirm an operational update for the Upper Jurassic Spanish Point gas condensate discovery which is located in Frontier Exploration Licence (FEL) 2/04. This licence, which also contains the Lower Cretaceous Burren oil discovery, is situated in the Main Porcupine Basin, c. 200 km off the west coast of Ireland in c. 400 metre water depth.
Under the terms of a 2008 farm-out agreement, Chrysaor elected to exercise its option (ref. RNS 14 March 2011) to drill up to two appraisal wells on the Spanish Point discovery. In return for committing to such a significant work programme, Chrysaor’s equity participation in FEL 2/04, and the adjacent FEL4/08, increased from 30% to 60%, with Providence and Sosina retaining 32% and 8%, respectively. As part of the agreement, Chrysaor provided a financial cap on Providence’s and Sosina’s financial exposure to the appraisal drilling costs.