Exploration company Providence Resources has announced the sale of its US oil and gas portfolio in the Gulf of Mexico to Dynamic Offshore Resources for a sum which could reach $22m.
The price comprises an initial cash payment of $15m, and potentially an additional $7m deferred cash payment. This is dependent on Dynamic reaching certain production levels from any new wells drilled on Ship Shoal 252, 253 and 267 before January 2013.
The company said the total current production from Providence's Gulf of Mexico portfolio is about 700 BOEPD.
The proceeds of the sale will be used to pay off debts.
'Whilst the production from the Gulf of Mexico has played an important role in the development of the Company over the past three years, it is now less material going forward', commented Providence's chief executive Tony O'Reilly.
'With our major drilling programme offshore Ireland starting, combined with our ongoing investment programme at Singleton, the investment focus for the company is now very clear. As such, the opportunity to realise cash from the Gulf of Mexico portfolio, and to deleverage the core business, made sense,' he added.
