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ISEQ higher- More oil for Providence?

Wednesday, September 05 09:21:59

The ISEQ is a little higher this morning at 3,156, up 6 points as markets are focused on tomorrow's ECB meeting and the action to be taken to stabilise bond markets. Nothing is expected on the interest rate side but there could be a surprise. Dolmen Stockbrokers looks at today's announcement from Providence Resources and the implications for reserves at Barryroe:

Providence Resources this morning provided an update on two new reservoirs in the Barryroe oil field. Having already provided oil in place estimates for the two main reservoir intervals (Middle Wealden and Basal Wealden) of 1,043 MMBO (P50), the company today noted a further 416 MMBO and 362 MMBO in the Lower Wealden and Purbeckian intervals, respectively. This brings the total oil in place resource estimates to over 1,800 MMBO, ahead of previous estimates (1,700 MMBO). The company has cautioned, however, that there are limited reservoir and test data available for the two new zones and that further well data will be required to firm up on final resource estimates.

As such, these two levels have not been included in the dynamic reservoir simulation modeling, which the company is currently running, the results of which are expected within the next six weeks. This will provide an update on recovery factors for the Middle and Basal Wealden Sands intervals. Today's announcement nudges up the total oil in place resource estimates, which is a positive for Providence, although the main short-term catalyst will be the assessment of recovery levels from the better defined Middle and Basal Wealden Sands according to Dolmen Stockbrokers.