LONDON -- Shares in Providence Resources (LSE: PVR.L ) have been on a bit of a tear this year, more than tripling on a succession of positive updates regarding the Barryroe oil field off the south coast of Ireland. Providence is the operator of the field and holds 80%, with the remaining 20% held by Lansdowne Oil & Gas (LSE: LOGP.L ) , as highlighted by Roland Head a few months ago.
Barryroe was originally discovered by Esso in the 1970s, but not fully developed. As a short video on the Providence website helpfully explains, oil price rises and technical improvements now mean previous discoveries like this are being reappraised. A marketing agreement is already in place with Royal Dutch Shell (LSE: RDSB.L ) , which was signed in early 2011.
Six wells have been drilled on the structure recently, of which a number were flow tested. Following this, Providence issued an oil-in-place resource estimate of 1 billion-1.6 billion barrels at the end of July from two reservoir intervals (the Middle and Basal Wealden).
Now Providence has released an oil place estimate of 0.8 billion-1.2 billion barrels for two more intervals (the Lower Wealden and the Purbeckian). Commenting on the announcement, Providence said:
As there is limited reservoir and well test data available over these two intervals, future well data over these two specific zones would be required in order to firm up the final resource estimates. As such, these zones have not been included in the Barryroe dynamic reservoir simulation modelling, which is currently ongoing, with the results expected within the next six weeks.
It is clear that more data are required over the [Lower Wealden and Purbeckian] intervals, however, the numbers are potentially material and provide room for significant resource growth in the Barryroe project in the longer term.
Providence shares rose 1% to 631 pence on the news, while Lansdowne gained 4% to 58 pence. SeaEnergy (LSE: SEA.L ) , which owns 21.5% of Lansdowne, put on 3% to 30 pence.
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