Providence said its Barryroe well in waters off the coast of southern Ireland flowed oil at a rate of 3,500 barrels of oil per day (bopd), exceeding the 1,800 bopd rate it said was needed for the oil field to be commercial.
The exploitation of oil could be a bright spot for Ireland and its struggling economy after the country sought an 85 billion euro ($113 billion) bailout in late 2010.
“The successful exploitation of hydrocarbons could be very rewarding because anywhere from 25-40 percent tax would be payable on a commercial development, that would be a very big boom for the Irish exchequer,” Providence’s chief executive Tony O’Reilly said.
London-listed shares in Providence, which have soared 62 percent in the last month, jumped 17 percent to 505 pence at 0827 GMT, valuing the firm at about 250 million pounds ($392 million).
O’Reilly, whose family owns a 20 percent stake in Providence, said the company is now looking to upgrade the total field estimates, currently standing at 60 million barrels recoverable.
“Hopefully those resource figures will increase and the recovery factor will increase and allow us to have substantial production...we haven’t put out any numbers though we do feel that there is an opportunity for an upgrading in the size of this accumulation,” he said.
Providence controls significant acreage off the coast of Ireland and is partnered with Lansdowne Oil & Gas on the Barryroe well.
Oil giant Shell also has interests in Ireland, and is hoping to develop the Corrib gas field off the north-west coast of the country.
