Oil and gas group Providence Resources (LON:PVR) this morning said that new 3D seismic analysis of its Spanish Point licence offshore Ireland has concluded that successful appraisal work on the discovery would likely result in a commercial development. The findings follow in-depth technical studies of the project, which is now expected to see drilling start in 2012.

Spanish Point is located in Frontier Exploration Licence (FEL) 2/04 in the Main Porcupine Basin, offshore western Ireland. It was originally discovered by Phillips Petroleum in 1981 and lies in around 400 metres of water. Providence operates FEL 2/04 (56%) with partners Chrysaor E&P Ireland (30%) and Sosina Exploration (14%).

The Spanish Point partners have recently completed interpretation of 3D seismic data acquired in 2009 and incorporated this into a comprehensive technical assessment of the discovery. Additional analysis has been undertaken on core obtained from the original discovery well but only available to the partnership in 2009. The results from new core-based goniometric, capillary pressure and rock mechanics studies together with hydraulic fracture modelling and new fluid compositional modelling have also been fed into the assessment.

The programme was carried out by Chrysaor on behalf of the partnership and included structural, static & dynamic modelling, integrated probabilistic modelling, development concept evaluation and economics. On the basis of this work, the partnership has concluded that successful appraisal of the Spanish Point discovery will likely result in a commercial development.

The partners have focused on two volumetric scenarios which indicate an in place resource which ranges from approximately 200-510 million barrels of oil equivalent (mmboe) with around 100-200 mmboe recoverable respectively. Field development would require between six and 14 horizontal fracture stimulated production wells depending on the final resource base. Most likely peak field production in all volumetric cases would be approximately 250 million standard cubic feet of gas per day and 30,000 barrels of oil per day.

Tony O’Reilly, the chief executive of Providence, said: “The completion of this technical work finally awakens the sleeping giant that is Spanish Point. This is not only a significant event for Providence and its partners, but for the whole Irish offshore. The last two years work has significantly de-risked Spanish Point and as such, it gives us every confidence in the successful future appraisal and development…

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