Irish exploration company Providence Resources has agreed to buy Star Energy's 79 per cent stake in the producing Singleton oil field in Britain for $22 million.
The deal, which is subject to regulatory approval, will increase Providence's interest in the Singleton oil field from 20 per cent to more than 99 per cent, with the remaining 0.875 per cent of the field held by Noble Resources.
As part of the transaction, Providence and Star have agreed a 50:50 joint venture on a proposed compressed natural gas project at the Singleton site.
Star will also be given a first option to utilise the Singleton oil field for gas storage purposes in the future.
The two companies have also agreed to work together on future gas storage opportunities in the Republic of Ireland on a 50:50 basis.
Providence chief executive Tony O'Reilly jnr said the acquisition was a "pivotal transaction" for Providence, enabling the company to increase its daily oil production to approximately 600 barrels of oil a day or 219,000 barrels a year. "This will ensure a solid operating cash flow on which to build our operations," he said.
"Having owned 20 per cent of Singleton for over 15 years, we are very comfortable with its operational parameters as well as its geological opportunities and we see upside in both these areas going forward."
Providence's oil and gas portfolio includes offshore interests in Ireland, onshore and offshore interests in the UK, and interests in the Gulf of Mexico and west Africa.
In Ireland, its major operations are in the Celtic Sea and the Porcupine Basin, where initial estimates suggest that its Dunquin Prospect could hold 20 trillion cubic feet of gas and three billion barrels of oil. Last month it announced it had positive test results in its Celtic Sea drills.
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