Lansdowne Oil sells stake in Celtic Sea licence

Kinsale Energy will fund 100% of the costs of drilling a well on the Midleton prospect

Irish exploration firm Lansdowne Oil and Gas has sold a majority stake in its Midleton/East Kinsale gas prospect to Kinsale Energy, a subsidiary of Malaysian group Petronas.

Under the deal, Kinsale Energy will acquire an 80 per cent interest in the licence offshore Ireland, fund 100 per cent of the costs of drilling a well on the Midleton prospect and fund Lansdowne’s share of the costs of any testing programme up to $2.5 million.

Lansdowne chief executive Steve Boldy said Kinsale Energy's team has a wealth of operating experience and has been producing gas safely from the Kinsale gas field and its satellites since 1978.

“Securing a farm-in partner for Midleton is a critical first step to delivering our objective of a multi-well programme in the Celtic Sea which, in addition to exploration wells, we expect to also include further appraisal/pre-development drilling on the Barryroe oil field,” he added.

Davy stockbrokers said the licence is attractive to Petronas as it already operates the Kinsale Head gas field, located some 20km to the southwest.

“Undoubtedly, Lansdowne would have preferred more final equity in the deal but 20 per cent of an active project is far more attractive than a full share of an inactive licence,” Davy analyst Job Langbroek said.