Oil announcement boosts shares
Shares in an exploration company are expected to soar after it announced an oil well discovered off the Irish coast could produce four times more than first thought.
Providence Resources said up to 1.6 billion barrels of oil have been uncovered in Barryroe, 50km from the west Cork coast.
Tony O'Reilly, chief executive of Providence, said Barryroe is one of north-west Europe's largest oil resources.
He said: "We are delighted that more comprehensive studies of Barryroe confirm a resource base of between 1 billion and 1.6 billion barrels of oil in place, with further potential for incremental resource growth. This is a considerable increase from earlier estimates, which indicated 373 million barrels of oil."
Providence Resources made the announcement on the Dublin and London stock exchanges.
This is the fifth time oil has been hit during explorations of the Barryroe licensing block, but the other wells fell below the commercialisation target when examined in the 1970s and 1990.
In March, the firm revealed flow rates were better than first expected and were almost double the 1,800 barrels of oil per day (bopd) barrier set by the firm as being commercial. The test area covered 300 sq km, equivalent to a medium to large North Sea oil field.
Mr O'Reilly said the oil was also of better quality than expected, describing it as a full-bodied claret. Benefits to the State include a 25% corporate tax rate as well as inward investment, he said. Further work is being done to examining how much of the oil can be extracted economically.
"We are delighted to be in a position to provide such a significant increase in the Barryroe oil in place resources," said Mr O'Reilly. "It is clear from these studies that Barryroe is a substantial oil accumulation across multiple stacked horizons with much running room for further resource growth."
Providence holds an 80% interest in the licence and operates it on behalf of its partners, Lansdowne Oil and Gas.