Wednesday, September 05 10:32:37
Irish oil and gas explorer Providence Resources said there are more oil reserves at its flagship Barryroe project off the coast near Cork than previously thought.
The Dublin-based company hiked its estimate of oil reserves at Barryroe in July to as much as 1.6 billion barrels and noted there was further potential in hydrocarbon bearing sands.
An evaluation of these deeper targets has now revealed that initial estimates for oil in place are in a range of 778 million to 1.16 billion barrels, with further data required before final resource estimates are given, said Providence.
"The numbers are potentially material and provide room for significant resource growth in the Barryroe project in the longer term," said Providence's technical director John O'Sullivan in a statement on Wednesday.
The company added it will continue to focus on developing the Middle and Basal Wealden sands, for which it provided the updated oil in place estimates in July.
Shares in Providence closed at 626 pence on Tuesday, slipping slightly from its peak of 684 pence in July.
Dublin brokers' analysts said the statement shows the enormous potential of Barryroe.
"This news further reinforces the prospectivity of the area. In a sense, it should not be that surprising in that a prolific regional source in the Purbeckian is juxtapositioned directly under plentiful sand packages in the overlying Wealden. It also suggests that Barryroe will not be the only development of Purbeckian oil in the Celtic Sea. The news is positive for the stock albeit that the resource identified has a lower technical confidence level than the Basal Wealden in-place resource identified at the end of July," said Davy's Job Langbroek.
"The next news from the Barryroe project is likely to be the recovery factor data for the Basal Wealden which now looks like it will be completed during October. Not factoring in the Lower Wealden or Purbeckian, we value the group at 17.45p per share with the Barryroe target making up £9.54 of that."