Exploration company Providence Resources has signed a farm-in deal with Capricorn Ireland Limited, a wholly owned subsidiary of Cairn Energy, for work on one of its exploration prospects.
The Cairn Energy deal is for Providence's Frontier Exploration Licence 2/14, which lies in about 2,250 metres of water in the southern Porcupine Basin and is located 220km off the south west coast.
Under the terms of the deal, Capricorn will take a 30% working interest in FEL 2/14 and it will pay 45% of the costs of drilling the 53/6-A exploration well in 2017. This is subject to a gross well cap of $42m.
It will also make a cash payment of $2.82m on a pro-rata basis.
Providence said that the 53/6-A well is planned to spud in June 2017 - subject to all regulatory approvals. It will use the contracted Stena IceMAX drill-ship targeting the Druid and Drombeg prospects.
Tony O'Reilly, the company's chief executive, said Providence was pleased to have agreed the farm-in deal with a "world class partner" such as Cairn.
He noted that the company has recently enjoyed considerable success with their Atlantic deep-water exploration programme offshore Senegal.
"The addition of Cairn brings additional technical capabilities to the JV partnership, whilst providing
Providence with additional financial and operational flexibility," Mr O'Reilly said.
He also noted that the licence had attracted considerable interest and Providence continues to discuss possible further equity divestment with other material industry players.
