Providence set for stake in Kinsale Head

Offshore staff

DUBLIN, Ireland – Eirgas has secured from Labuan Energy an option to acquire a 40% interest in the Kinsale Head Area gas production complex in the Celtic Sea.

Labuan is the overseas investment division of Petronas, which bought the complex from Marathon earlier this year for $180 million. The complex comprises the Kinsale Head, South West Kinsale, and Ballycotton fields.

As part of the same package, Eirgas would pick up 86.5% of the Seven Heads field, a subsea satellite to Kinsale. The company has until mid-September to exercise its options.

Tony O’Reilly, chief executive of Eirgas’ parent company Providence Resources, said: “Assuming…the transaction completes as planned, not only will Providence’s attributable daily production double to over 4,000 boe/d, but we will also gain exposure to existing and new gas storage and trading opportunities.

“Additionally, the deal would give Eirgas an opportunity to potentially monetize gas from some of Providence’s adjacent gas discoveries in the Celtic Sea, as well as from third party fields.”

06/16/2009