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Ireland oil strike raises hopes for exploration boom
Providence Resources boss Tony O'Reilly Junior said: 'I think this discovery also creates a reappraisal in the minds of global oil corporations about coming back to Irish waters to drill for oil'

Henry McDonald in Dublin
guardian.co.uk, Thursday 15 March 2012 15.51 GMT [

Providence Resources oil rig operating in Barryroe, off County Cork. The company's oil is expected to trigger an oil exploration boom in the Republic.

Oil has been struck off the County Cork coast in a potentially multibillion-pound discovery that could help to drag Ireland's recession-stricken economy out of the mire.

Dublin-based Providence Resources announced on Thursday that oil has successfully started to flow from its Barryroe well in the first big find in Irish territorial waters.

The oilfield, which is about 50 kilometres off the Cork coast, has a flow of more than 3,500 barrels a day, a number which exceeds the company's original projections of 1,800 barrels.

One recent audit of the area found that it might contain the potential to produce almost 1bn barrels of oil, making the field worth billions at today's crude prices of well over $100 a barrel.

The test area off the Cork coast covered 300 sq km, which according to Providence is equivalent to a medium-to-large North Sea oil field. The oil was discovered at a depth of about 100 metres in the sea bed.

Successful drilling at the Barryroe well will increase pressure on the Irish government to grant permission for oil exploration at five further sites in Irish waters. These include the most controversial site, at Dalkey Island in Dublin Bay, close to an exclusive stretch of the capital's coastline which is home to Irish rock stars such as Bono and Enya.

If an oil rig were constructed near the uninhabited island it would be in the line of sight of homes belonging to celebrities on Dublin's so-called "gold coast". An alliance of community groups in one of the richest parts of Ireland as well as conservation groups such as Birdwatch Ireland and An Taisce, the republic's National Trust, are understood to be planning a campaign against the drilling project. The island is home to a seal colony and the waters around it are used for fishing pollock and mackerel as well sea diving.

Providence Resources, whose chief executive is Tony O'Reilly Jr, the son of the former boss of Independent News and Media, said it was pleased the flow rates from Barryroe were higher than the pre-drilling target.

O'Reilly said the discovery was a "seminal day for Ireland, especially in the runup to St Patrick's Day". Of the higher than expected oil flows he said: "As the Americans say, 'We didn't hit a home run, we knocked the ball out of the park'. I think this discovery also creates a reappraisal in the minds of global oil corporations about coming back to Irish waters to drill for oil. Irish territorial waters are massively under-explored." The oil was of good quality, described as "light but waxy crude".

O'Reilly said the company was exploring for oil in Northern Ireland near Rathlin Island and he hoped the Barryroe find would lead to the creation of an onshore oil industry in Ireland.

"We've always said as an Irish company we want to use as much Irish infrastructure and resources as we can. We don't have an oil industry in Ireland at present but I hope something like Barryroe and the success we are getting in that will thrive more interest in creating more of an infrastructure in Ireland."

While the find is small by the standards of the Middle East or even the North Sea it could reduce the republic's national energy bill and have a significant spinoff for the entire economy.

Ireland is heavily dependent on imported oil and gas. The Irish Offshore Operators' Association points out that more than 90% of Irish gas is imported while oil accounts for nearly 60% of overall Irish energy consumption.

Fergus Cahill of the Irish Offshore Operators' Association said: "It's very encouraging and positive. First of all it's the first discovery in Irish waters that looks to be declared commercial. The flow rates are encouraging. Secondly, it will encourage other explorers because one of the problems that have dogged Ireland has been the explorations in the past. Almost all of these discoveries were of gas, not oil. If it gets developed, which we hope it will, it will reduce our dependency on imports, increase taxation revenue and create jobs."

The Irish exchequer will benefit from the potential oil boom as the republic's department of finance gains a 25% tax take from any oil or gas revenues.

Offers from who is the question?

Tesco, Asda, Sainsburys....could be anybody......perhaps even Chevron...or BP...etc..

Expecting offers for "this full bodied Claret".

I prefer burgundys myself.

Anything but tar pour moi!

Resource Upgrade within months at Barryroe and over 60 enquiries from Aberdeen about it according to today's Irish Independent.

The discovery of Ireland’s first commercial oilfield has raised the hope that the country’s ailing economy might be revived. Possibly worth $110bn at yesterday’s prices, the wealth is comparable to the €85bn emergency bailout arranged for Ireland in 2010. The find, about 30 miles off Cork, was announced yesterday by Providence Resources, which owns 80% of the field. “It’s just like winning the lottery,” said the chief executive, Tony O’Reilly Jr, whose father is the tycoon who owns Independent News and Media. “It’s a defining moment for the Irish offshore oil and gas industry,” said Mr O’Reilly, who added that it could bring about an Irish oil bonanza and help to remove Ireland’s almost complete dependence on imported energy. More than 90% of its gas comes from overseas, and oil accounts for nearly 60% of energy use overall, the Irish Offshore Operators’ Association said, The Times reports.

Oil production at Ireland's first commercial discovery could reach as high as 20,000 barrels a day when production commences at the Barryroe field in the next three years. Yesterday, Providence Resources chief executive Tony O'Reilly Jnr confirmed Wednesday's Irish Examiner story that a commercial oil field had been discovered. Providence Resources technical director John O'Sullivan said that depending on the production strategy deployed, the field could produce as much as 20,000 barrels per day (bopd). The UCC geology graduate said they may utilise horizontal wells to give better access to the 300 sq km oil field - equivalent to a medium to large North Sea oil field. Mr O'Reilly said flow rates of 3,514 bopd had been discovered at 100-metre depth in the North Celtic Sea Basin. "The well has also confirmed that the basal sands are laterally continuous, highly productive and that the oils are of a very high quality," he said. This is twice the 1,800 bopd target set by Providence as being large enough to deem it a commercial find. Mr O'Reilly, whose family owns a 20pc stake in Providence, said the company was looking to upgrade the total field estimates, standing at 60 million barrels of recoverable oil. "Hopefully those resource figures will increase and the recovery factor will increase and allow us to have substantial production... we haven't put out any numbers though we do feel that there is an opportunity for an upgrading in the size of this accumulation," he said. Mr O'Sullivan said the 500 bopd equivalent in gas, which the well is throwing off, would be used to power a production oil rig. Any spare capacity could be diverted to the gas pipeline serving the Seven Head Gas Filed, just 3km from Barryroe discovery. The Irish Examiner

Providence And Lansdowne Deliver Ireland’s First Commercial Offshore Oil Flows

No doubt there were a few champagne corks popped in Dublin on Thursday when Irish resource company Providence Resources delivered the first ever commercial oil flows offshore Ireland. This event has been many years in the making: the Barryroe field in the Celtic Sea, which underlies the Seven Heads gas field, was first discovered in 1974 by Esso but technical challenges, low oil prices and regulatory terms conspired to hold back its development. AIM-quoted Providence, however, which only took over operatorship in late 2010, saw that times had changed and that Barryroe was now ripe for development as long as its waxy crude could flow at commercially viable rates.

That question has now been comprehensively answered, with the 48/24-10z appraisal well, the sixth on the field, flowing 3,514 barrels of oil per day and 2.93 million cubic feet per day (4,000 barrels of oil equivalent per day). The wax content is 20 per cent but the crude is light (42 degree API) and highly mobile. In fact, the oil quality is better than expected; the company had thought the wax content would be slightly higher and did not expect the viscosity to be as low as 0.68 centipoises (which is lower than water) – this means the field could be a candidate for future water flood which would, the company says, “materially” increase recovery rates. Faulting is also relatively low compared to the overlying Seven Heads gas field, where unexpected compartmentalisation impacted production rates and sank project operator Ramco Energy.

Barryroe’s highly commercial flowrate – much higher than the 1,800 bpd anticipated and the 1,300 to 1,600 bpd delivered by earlier exploration and appraisal wells – came from only a 24 feet thick net pay interval in the oil-bearing basal Wealden sandstone (and rates were constrained by equipment limitations) with the upper gas-bearing basal reservoir section now being prepared for testing. High angle production wells could actually deliver even higher rates than this simple vertical well.

As a company briefing note puts it, “in layman terms, it’s bigger in overall size, thicker in reservoir intervals and with much better flow rates than we had hoped for”.
Importantly, the company says the well confirms that this basal sand reservoir is continuous and the oil water contact much deeper than previously thought. This all has implications for the reserve potential. The primary basal sandstone reservoir spans some 300 sq km, about the size of medium to large North Sea oilfield.

Chief executive Tony O’Reilly, who at last month’s oilbarrel.com conference delivered an upbeat assessment on the future for Ireland’s offshore industry after many decades of disappointment, said the well had confirmed that the basal sands were laterally continuous and highly productive. Prior to this well, RPS Energy gave the field P50 and P10 oil-in-place estimates of 373 million barrels of oil and 893 million barrels respectively. The 2C technically recoverable contingent resource was put at 59 million barrels. Providence has an 80 per cent interest alongside fellow AIM company Lansdowne Oil & Gas with 20 per cent (another AIM company, San Leon Energy, gave its 30 per cent interest in Barryroe to Providence in return for a 4.5 per cent net profit interest on the field).

Now work begins to move the field towards development using horizontal wells with artificial lift. The first step is to complete testing of the upper gas zone and suspend the well for future use. Development modeling will get underway, as will permitting. Providence is also seeking to bring in farm-in partners to reduce its capex exposure and ensure there are the right skills in place to handle the offshore development.

This is good news for the co-venturers, which both saw their shares advance on the news, and for cash-strapped Ireland, which in late 2010 took an IMF bailout to stave off bankruptcy. As O’Reilly told delegates at oilbarrel.com last month, the Irish offshore has seen a number of false dawns in recent decades, with sporadic bursts of exploration over that time yielding a number of discoveries but only the Kinsale Head, Ballycotton and Seven Heads gas fields have actually made it into production. That all changes with this positive oil test.

“There are a number of legacy discoveries offshore Ireland – unconventional and straightforward – that may now be taken much more seriously,” said analysts at Dublin stockbrokers Davy. “Providence is particularly well poised to avail of this opportunity with the foremost licence position offshore Ireland.”

Providence certainly plans to play the role of catalyst when it comes to the Irish offshore. Barryroe is the first in a two-year multi-well, multi-basin US$500 million drilling campaign, the largest ever offshore Ireland (Providence will be on the hook for US$80 to US$120 million of this). The potentially game-changing work programme, which will really put Ireland on the oil and gas map, will include a rank exploration well at Dalkey Island offshore Dublin (with a planned spud in Q3), an appraisal well on the Dragon gas field in the East Irish Sea, drilling on Rathlin Island in Northern Ireland and then the big stuff off the west coast, Spanish Point, where there’s a potential 200 million boe recoverable resource, and the “uber-giant”, Dunquin, which could hold 1.7 billion boe.

Back Print this news item

http://oilbarrel.com/news/providence-and-lansdowne-deliver-irelands-first-commercial-offshore-oil-flows

Been a superb week for them.....bit of a waiting time till the next spud....and this coming year will be exciting...

Irish oil rush hinges on push into deeper waters
Fri Mar 16, 2012 5:46pm GMT By Tom Bergin

LONDON, March 16 (Reuters) - The euphoria around a small-to-medium oil discovery off the southwest coast of Ireland may be overblown but the country could yet become a significant producer if it can replicate the drilling success in much deeper waters to the west.

Providence Resources made headlines around the world and sent its shares soaring on Thursday by announcing that flow tests on its Barryroe field showed it could yield "significantly" more that its earlier estimates of 20,000 barrels per day and reserves of 60 million barrels of oil.

The Barryroe find is one of a number of discoveries made in the 1970s and 1980s but which were deemed to be too small to be developed economically.

Higher oil prices and new technologies, such as more detailed seismic surveys and horizontal drilling, can now allow the oil to be extracted at a profit.

Providence predicted the find could spur the development of other fields in the Celtic Sea and, after decades of fruitless searching, lead to an Irish oil boom.

The prospect of additional tax revenues and a dent in the country's 160,000 barrels per day of oil imports, was a boost for economically challenged Ireland.

However, the actual impact may not live up to the hype generated by headlines such as "Oil and gas find set to spark black gold rush" and "Massive oil discovery proves luck of the Irish".

The potential for major finds -- those in the hundreds of millions of barrels -- is seen as low in Celtic Sea, which has been the subject of decades of exploration.

"The geological structures in the Celtic Sea are small and fractured," said Fergus Cahill, chairman of the Irish Offshore Operators' Association.

For many in the industry, more excitement is focused on the much less explored blocks far off the West Coast.

The Irish government estimates that what it calls the Irish Atlantic Margin could have "potential" oil and gas reserves of 10 billion barrels of oil equivalent.

"The geological structures off the West Coast are bigger," Cahill added.

Tempted by such a prize, the largest non-government-controlled oil company in the world by market value, Exxon Mobil, Italian oil major Eni and Spain's Repsol have bought into the Dunquin exploration block in the Porcupine basin.

Providence, which first acquired the licence for the Dunquin block and retains an interest, said the block has prospective recoverable resources of 1.7 billion barrels.

Rival San Leon Energy estimates its block nearby could have 1 billion barrels of oil in place.

The finds will need to be big to be economic. While the Celtic Sea finds sit in around 100 metres of water, the Dunquin block has depths of 1,600 metres.

The Exxon-led team at Dunquin plans to drill a well next year and industry sources say it will likely cost in excess of $100 million.

If the well hits pay dirt, analysts at Davys have estimated it could be worth over 26 euros per share to Providence. The group's share price traded at 5.77 at 1553 GMT on Friday, after an almost 20 percent boost from the Barryroe find.

"It's a question of cracking the code in a massive area," Providence Chief Executive Tony O'Reilly said.

http://af.reuters.com/article/energyOilNews/idAFL5E8EG2EQ20120316?sp=true

Note Blackrock dipping in for a few in last week!!!!

Just noticed that:
BlackRock Investment Management now hold 4,300,681 ordinary shares of 0.10 each in the capital of Providence Resources.

This represents 8.63% of the issued ordinary share capital.

Doubled their holding too....

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Good result, but the sp might hang around 500p for some time now....

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Sold out of the others...still in SEA....but I will be back...PVR has a lot going for it.....once the next part of the campaign gets underway...

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