Providence, Sosina sign Spanish Point discovery farm-out

Providence Resources and Sosina Exploration have signed a staged farm-out agreement with Chrysaor Holdings for the Spanish Point discovery, in the Porcupine basin, off the west coast of Ireland.

Offshore staff

DUBLIN, Ireland -- Providence Resources and Sosina Exploration have signed a staged farm-out agreement with Chrysaor Holdings for the Spanish Point discovery, in the Porcupine basin, off the west coast of Ireland.

The agreement allows for Chrysaor to conduct a significant appraisal work program on the Spanish Point discovery in return for a minimum 30% interest in the license. Chrysaor then has the option to earn up to a maximum 70% interest in the event that two wells are subsequently drilled on Spanish Point.

The agreement is subject to certain milestones being achieved with an initial commitment by Chrysaor to fund the budgeted cost of a 3D seismic program on Spanish Point as consideration for the initial 30% interest. Providence will retain a 56% interest in, and the operatorship of, Spanish Point for the upcoming seismic program, with Chrysaor taking a 30% interest. Sosina will retain a 14% interest.

Dependent on the results of the 3D seismic program, Chrysaor may then finance the drilling of up to two appraisal wells where it will commit not less than 60% cost share, while also capping the other partners' cost share, to earn an additional interest of up to 40%, thereby reducing the other partners' stakes pro rata.

08/12/2008

More in Company News