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Tony O'Reilly jr close to Barryroe deal

Tuesday, April 15 11:19:15

Tony O'Reilly junior-led oil and gas explorer, Providence Resources, this morning said it noted recent press reports and today confirmed that the firm is in talks with a number of "interested third parties" regarding its Barryroe asset.

According to reports, Providence is close to securing a $300 million investment in the ISE and AIM-listed project to extract oil off the south coast of Ireland.

Mr O'Reilly's firm has been sounding out bigger industry partners to invest in the Barryroe oilfield in an arrangement known as a "farm-out" in the industry.

In a statement this morning its said "Providence can confirm that it is in commercial discussions with a number of interested third parties in relation to the Barryroe asset. The nature of these discussions involve the evaluation of the field on a phased development basis, with plans to establish an early production phase, to be followed by further phases of field appraisal and development, designed to steadily increase production rates to maximise the returns from the field. The ultimate development programme would be conditional, inter alia, on the receipt of all necessary regulatory approvals."

"There can be no certainty that a mutually acceptable agreement will be reached. A further update in relation to the Barryroe farm-out will be provided via Providence RNS, as and when appropriate," it added.

Having held negotiations with at least a dozen interested parties, Providence's advisers at Rothschild have refined the talks down to one large American operator with whom talks are at an advanced stage, the Evening Standard in the UK reported.

Investors have been holding out for decades for a major Irish oil play. Exxon first found oil at Barryroe - 45 miles south of the Irish coast - in 1974 but deemed it uncommercial with that era's technology. The Corrib field, 52 miles off the west coast could be enough to supply 60 per cent of Ireland's gas needs, its operator Shell has claimed, although that field's exploitation was delayed by environmental concerns.

However, with new engineering techniques, and a higher oil price, Mr O'Reilly has said Barryroe "could be the new North Sea".