At last, a real and current valuation on the Corrib Field!

Marathon sold its 18.5% stake in the Corrib Gas Field to a Canadian oil trust called Vermilion (who happen to be France’s largest oil producer!) http://www.vermilionenergy.com/files/pr ... -06-24.pdf
Vermilion will initially pay US$100 million with a further amount ranging between US$135-300 million when gas is produced (late 2011). Pro-rata this values the entire field and license in 2011 at $1.27 to $2.162 billion (€907 million to €1.544 billion). Many billion € less than what I have read it was worth on some sites.

Vermillion will also have to assume its share of future capital expenditure of $300 million (entire field $1.62 billion).

Vermillion also point out what I highlighted from the Serica presentation above, namely that the Corrib field goes into major decline 2-4 years after it starts production. Yeah, all the protesting and building and 2 years later and the field goes into decline!

My conclusion is if we want anything close to gas self-sufficiency we need to find AND develop a field the size of Corrib every 4 years. Corrib itself only reduces our dependency to UK imports to 40%.

Separately from my reading of Marathon’s version of events http://www.marathon.com/News/Press_Rele ... id=1301886 they will be booking a loss of $150 million on the transactions, I’m guessing this is based on their costs to date.

Marathon also flogged Kinsale to Petronas late last year . Sadly Tony O Reilly just got an option to buy 40% of the Petronas stake since and we all know what happens when you let Tony O Reilly near key infrastructure assets ....eg eircom .

Lets hope this does not halt the development of some small fields off Cork that need to be router via Kinsale to make them economic .

An update from Serica, page 6 http://www.serica-energy.com/news/wp-co ... report.pdf


Effectively it is yet another dry hole for offshore Ireland. No future fiscal lift from oil then.

Later they mention they have been awarded some acreage in the Rockall Basin.


To put that in context, the entire Island of Ireland is 81,000 square kilometers. Rockall is bigger than Ireland but has been drilled 3 times. We’ll have to get the finger out.

There was a gas find 7 years ago but I am not aware if there had not been any progress since.

We were lucky twice in January. As 90%+ of our gas is imported from UK (who import 60%+ of their needs) and the UK ran into trouble not from the normal Russian/Ukrainian tiff but from the frozen Norwegians.

First problems on a gas platform in the first week of Januaryhttp://in.reuters.com/article/oi ... EM20100107 could have lead to a gas supply cut here or again on the 10 January with the Norwegians having problems with the processing facility that handles 55% of their gas http://www.energy-pedia.com/article.asp ... eid=138523. In UK the National Grid cut gas to large users. Could Ireland be one? What happens when it is a choice between Irish households and UK households.

The current UK gas price on http://www.apxgroup.com is 34 pence a therm, it tripled when it was looking scarce. When we are cut off what sort of spike in price will we have in peat briquettes. Will a scap in Spar be common for the last firelog? We will relook at the BER D rated houses will open fire places.

If the State will not pay for strategic gas reserves then we may be very grateful that Providence Resources do, even at a price (I’m a shareholder).

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The Rothschild family decided to look for gas in the Irish Sea, alas in the UK part next to several other gas fields. http://agoraoil.com/press-release/agora ... irst-deal/

It is part of a $200million investment in exploration in Norway and UK. They do not say why they are not interested in Ireland.

I have spent 50% of my working life as an accountant with Marathon in Cork. As has been pointed out numerous times as of today Kinsale is our only commercial find, until Corrib comes along sometime early next year, depending on what action to hippies take. Corrib is from what I hear is a 1 TCF field, or about the same size as Kinsale was. It should provide the country with gas for 10years. There are other smaller potential fields around it but nobody knows for sure, whats contained.

I personally think that we should resign ourselves to the fact that its highly unlikely that a further commercial finds will be found anytime soon, I have a very good friend who is the Commercial Director with a company called Anadarko, based in Houston. I had a call from him over christmas as we had a chat, he's take on the Irish western seaboard is the its too risky, too expensive, and most companies wouldn't touch it with a "barge pole" in the present climate.

Providence does have shares in Dunquin, and the Goban Spur but drill costs are estimated to be $150m to $200m per hole. and thats if you get the correct rig, development costs are anyones guess, I have heard figures of $3bn per platform up to $5bn.

When Burke enacted the famed legislation Marathon embarked on a serious drilling programme from the Wexford coast to the South Porcupine Basin, we found no commercial fields, there are many small pockets of oil and gas, like 7 heads but nearly all are fractured and difficult to exploit. There is potential but huge risk, and as on Geophysicist said to me once "we were only geological second out" or 100,000 years in our language.

When oil was under $10 a barrel?

And costs were ten times lower...

At 150 dollars a barrel it might be worth it...

Statoil did, as did everyone else at the time, problem is that 2D and 3D seismic is fine to identify but you still have to drill a hole to be sure, even at $150 a barrel its all about risk and we all know how the banks love taking risks these days.

As I said earlier there are a few places of interest around corrib, but I fear that it will be a while before the are explored, sheer cost is one hurdle, and the availability of a suitable rig to drill is an other, as when oil was at $10 many rigs were mothballed, sold for a song, now there is a shortage, and they apparently charge $500,000 per 12 day and thats in the Celtic Sea where the weather is fairly benign in comparison to the Western sea board.

Time will tell but its going to be a while.

'Providence does have shares in Dunquin, and the Goban Spur but drill costs are estimated to be $150m to $200m per hole. and thats if you get the correct rig, development costs are anyones guess, I have heard figures of $3bn per platform up to $5bn.'

Exxon and ENI will be paying for most of the drilling costs in return for the lions share in each prospect. Providence retain 16% in Dunquin . Before we jump up and down about 'giving away'... 'our' resources , remember that only the Major oil cos. have the technical and financial means to drill these very expensive wells in frontier deep water. if they didnt exist the oil / gas if its there - would remain there. We dont have any onshore oil or gas so building a NOC or state oil company would be quite risky as it depends on deep water drilling success. We also dont have a large enough population to absorb the costs of a NOC like India ,China , or Brazil so the inevitable result is that the Majors must be enticed to drill by the prospect of retaining a larger share of the find than is the case in other countries. As for Ireland having only small pockets of oil, this isnt quite true. With additional appraisal wells, Providence's Spanish point prospect may prove to be in the 200-400 million barrel range and capable of producing 100,000 barrels a day. There are large gas prospects off the Wexford coast in Providence Resources portfolio- next door to the Dragon gas field which supplies Milford Haven. Then there is all the Porcupine basin stuff. But oil needs to be around 80-100 $ a barrel long term for most of it to be an attractive proposition.

Its the drilling cost that I'd worry about, and being able to finance it, Hook head wasn't cheap by standards that I remember in the 1990's, $10m to $15m was the going rate then for a 30day hole (testing was always extra). I agree that Dragon area is there but doesn't is stagger the UK part of the Irish Sea? giving rise to further complications with regard tax to name one. Spanish point is a fair point, as a matter of interest what kind of figure would you think a production platform would cost?

"Its the drilling cost that I'd worry about, and being able to finance it"

Let Exxon and ENI worry about it, its not a lot of money for them, and as they are such big companies ,they need to keep finding giant oil fields to grow. Its interesting that with new seismic technology , they are revisiting the Porcupine Basin. There is reputedly new 3d Seismic information that was not available in the 1980s to previous drillers, when 2d was all they had to go on. Drilling is much changed these days- less guesswork etc. Providence are hoping to piggy back on any find.



"I agree that Dragon area is there but doesn't is stagger the UK part of the Irish Sea?"

Not talking about Dragon but the 5 or 6 potentially larger Prospects adjacent to them - see Providences website under Irish operations - Pegasus and Orpheus prospects.

http://www.providenceresources.com/inte ... 20map.aspx



"Spanish point is a fair point, as a matter of interest what kind of figure would you think a production platform would cost?"

Dont know , but Providence in planning Spanish Point , are using 120,000 Boepd as a figure for capacity for field development - a very significant figure - Tullow oils daily oil and gas production is approx 60,000 barrels equivelant a day. So if it were to be proven to be capable of producing this for a sustained period of time, then id suggest that a proper large oil rig would be required

disclaimer: i have a modest shareholding in Providence Resources - its one for the patient and there wont be any overnight fortunes made.

provide it at a price that shell want to SELL it to us you mean.
its not as if we are going to get that gas for free or even a discount.

Currently working in Exploration for a Multinational Oil company in Norway. We are planning to drill an exploration well with a Heavy Duty Jack-up this summer. Our AFE is $120 million and we are not planning a well test. Our dayrate for the rig is over $300,000 / day but the burn rate for operating the rig is closer to $500,000 per day.

I would estimate that the cost of a deep water semisubmersible rig or Drill ship capable of drilling in the harsh environment of the Atlantic would command a dayrate of over $500,000 / day with a burn rate of $750-800K / day. Throw in the cost of a well test and I reckon you wouldn't have much change out of $150 million AFE for one exploration well.

Fingers crossed Exxon Mobil and partners find something so that we can attract more interest in drilling off our Western coast. Our government could certainly do with the cash.

As for people who think we should set up our own state oil company. Going by our track record it would be the quango of all quangos. I shudder to think of how bloated, corrupt and inefficient it would be with a board stuffed with political and Union jobsworth's. It would truly make FAS look like the most dynamic and resourceful entity in the State.

The only place I'd like to see them find oil is in the Dail... at least that way we might see the back of them for a while

Unquestionably it is best to avoid any government input such enterprises.
We would probably have test holes being drilled in Offaly in order to create local jobs instead of anywhere there might be a chance of finding oil!

+1

I am working on a project in the North Sea, shallowish water (180M) and the costs are around $320000 p/d