Irish independent Providence Resources is eying a potential risk sharing alliance with a drilling firm and contractors to help it move forward on its Barryroe oil field offshore Ireland.
Providence, 80% owner and operator of the Barryroe field, has been on a long-term huntn for a farm-in partner to fund further appraisal work on the field, in the North Celtic Sea Basin.
While farm-out discussions continue, it says it is discussing a drilling proposal from an alliance of contractors under a risk-sharing cost model - making use of the current low rig rates and giving work to rig operators in an over supplied market.
The alliance consists of a major rig operator, drilling management and well service company, says Providence, with cost estimates at around £16 million.
Tony O’Reilly, Providence's CEO, says: “Despite the difficult operating environment, Providence has continued to progress its activities across its portfolio of assets in the Celtic Sea basins. The Barryroe farm out remains our key focus and whilst we are not yet in a position to confirm the structure of a transaction, we continue to work to that end. In that regard, the most recent cost dynamics illustrate the highly competitive new cost environment for drilling."
The firm is also in discussion over using existing infrastructure to develop the Barryroe C-Sand gas resources.
“Given the proximity of the existing nearby gas infrastructure and available capacity, we have commenced discussions with the owners of the existing infrastructure as to whether part or all of their infrastructure could play a role in accelerating any development of the Barryroe gas resources,” said O'Reilly.