Providence Resources has agreed to farm out a 40% equity interest in Licensing Option 10/1 to Nautical Petroleum plc (Nautical).

Licensing Option 10/1 contains the Baltimore heavy oil discovery situated some c. 30 kilometers offshore Ireland in the North Celtic Sea Basin in c.100 metre water depth. Discovered in 1992, this 11o API heavy oil accumulation is estimated to have an in place resource potential of up to c. 300 MMBO.

In return for the 40% equity stake, Nautical will fund and carry out a focused work programme on the development feasibility of the Baltimore discovery. Providence will retain a 60% equity interest, operated through its special purpose vehicle, EXOLA Limited. Nautical is currently involved in a number of similar heavy oil field developments in the UK North Sea including the Kraken discovery, which they operate, and Mariner, which is operated by Statoil. The farm-out transaction is subject to Irish governmental approval.

Tony O‟Reilly, Chief Executive of Providence, said, “We are extremely pleased to have secured such a capable JV partner for the Baltimore project so quickly following the award of the Licensing Option. We are particularly pleased to be working with Nautical who have a real track record in the development assessment of offshore heavy oil projects.”

Steve Jenkins, Chief Executive of Nautical, said,“We look forward to working with Providence and using our expertise in heavy oil developments on this exciting discovery in this new arena.”

Tags: Providence Resources Plc