Providence gets approval to transfer 30% of Irish licence to Cairn Energy
Cairn will pay up to $42m to drill in Porcupine Basin
Tony O’Reilly, chief executive of Providence Resources, which has received approval from the State to transfer part of an Irish exploration licence to Cairn Energy. Photograph: Brenda Fitzsimons
Providence announced in March that it had reached agreement with Cairn, via its Irish subsidiary Capricorn, to transfer the stake in the so-called Fel2/14 licence. The licence includes two drilling prospects more than 200 miles off the coast in the Porcupine Basin, at Druid and Drombeg.
Under the terms of the agreement, Cairn will stump up for 45 per cent of the drilling costs, up to a cap of $42 million. It is expected that Drombeg and Druid will both be drilled this summer. The licence also includes another prospect, known as Diablo.
Providence, which is led by Tony O’Reilly junior, will retain a 56 per cent stake in the licence, which it will continue to operate. British explorer Sosina holds the remaining 14 per cent.