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UK independent Chrysaor is to become operator of the deepwater Spanish Point gas condensate discovery in the Atlantic Margin offshore Ireland, with the company and its partners to drill up to two appraisal wells on the find.
Partner and Irish independent Providence Resources confirmed that Chrysaor was taking over as operator of the Upper Jurassic Spanish Point discovery, which is located in Frontier Exploration License (FEL) 2/04. The license, which also contains the Lower Cretaceous Burren oil discovery, is situated in the Main Porcupine basin, around 200 km (124 miles) off the west coast of Ireland in 400 m (1,312 ft) of water.
Under the terms of a 2008 farm-out agreement, Chrysaor elected to exercise its option to drill the appraisal wells on the Spanish Point discovery. In return for committing to the work program, Chrysaor’s equity participation in FEL 2/04 and adjacent FEL4/08 increased from 30% to 60%, with Providence and fellow partner Sosina retaining 32% and 8%, respectively.
As part of the agreement, Chrysaor provided a financial cap on Providence’s and Sosina’s financial exposure to the appraisal drilling costs.
Following a recent partnership meeting, the 2012 budget has been unanimously approved, with the budget including the provision for well design activities as part of the ramp up for an appraisal drilling program in 2013 on Spanish Point. The plan is to spud the initial appraisal well in the third quarter of 2013 subject to rig availability and governmental approvals.
Spanish Point was discovered by Philips Petroleum in 1981 but was not appraised due to lack of gas infrastructure and market in Ireland at the time.
The partners also agreed to the transfer of the operatorship of FEL 2/04, FEL 4/08, and Licensing Option 11/2 from Providence to Chrysaor, subject to Irish government approval.