Irish exploration group Providence Resources and oil giant ExxonMobil have defined the location of the wells for the Dunquin prospect off the west coast, Providence chief executive Tony O'Reilly Jnr told shareholders yesterday.
Providence signed a farm-out agreement in February with ExxonMobil for Dunquin, which the company says has the potential to produce enough oil and gas to power the whole of western Europe.
The company has finalised the work programme for this year with ExxonMobil and will begin a seismic programme next month, Mr O'Reilly said at Providence's annual general meeting.
Under the terms of the agreement, ExxonMobil will explore the site in return for 80 per cent of the prospect. Providence's existing 80 per cent stake will fall to 16 per cent, while its partner in the venture, Sosina Exploration, will see its stake fall from 16 per cent to 4 per cent.
Providence is seeking acquisition targets in north-western Europe and North America as oil prices continue to hover near $70 a barrel. It aims to increase its daily production to 2,000 barrels of oil per day within 12-18 months by developing its assets and buying more, with the help of a €50 million revolving credit facility from Australia's Macquarie Bank.
"I would describe 2006 as a year of transition," Mr O'Reilly said. "It's a year of getting all our ducks lined up, bringing in new partners and working together on a drilling programme for next year."
Providence expects to choose a partner for its Spanish Point site, also off the west coast, in the next four to six months after opening its data room for the project in May, the chief executive told reporters after the meeting.
The Spanish Point project was successfully drilled and tested in 1981 by a consortium that included a predecessor company to Providence. The project didn't take off at the time because of lower commodity prices and a lack of gas infrastructure in Ireland.
"I think there will continue to be significant interest in Spanish Point," he said. "The 24th licensing round, which is very busy, has just ended so there should be more interest after that."
The exploration company applied for acreage in the east Irish Sea under the UK's 24th seaward licencing round, Providence announced yesterday. It also said that daily production from Singleton, one of the largest onshore oilfields in the UK, has risen 55 per cent to 670 barrels of oil a day.
