Providence Resources (LON:PVR) has agreed a deal to farm out 40% of its interest in the Baltimore heavy oil discovery in the North Celtic Sea to fellow AIM-listed oil and gas group Nautical Petroleum (LON:NPE)

The move will see Nautical pick up the costs and workload of a development feasibility programme on the Baltimore discovery, which was awarded to Providence as part of Licensing Option 10/1 in February this year. Providence will retain a 60% equity interest in the licence.

Nautical is currently involved in a number of similar heavy oil field developments in the UK North Sea including the Kraken discovery, which it operates, and Mariner, which is operated by Statoil.

The Baltimore heavy oil discovery lies around 30km offshore Ireland in the North Celtic Sea Basin and is estimated to have an in-place resource potential of up to 300 million barrels of oil.

Tony O'Reilly, the chief executive of Providence, said: “We are extremely pleased to have secured such a capable JV partner for the Baltimore project so quickly following the award of the Licensing Option. We are particularly pleased to be working with Nautical who have a real track record in the development assessment of offshore heavy oil projects.”

Shares in Providence rose by 3.8% to 3.48p on the news while Nautical shares were up 4% to 64p.

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here