Irish explorer Providence has confirmed that French supermajor Total has completed the farm in of the Avalon prospect in the Southern Porcupine Basin.
This follows approval of the Minister of State at the Department of Communications, Climate Action and Environment to the transfer of 50% equity and Operatorship of LO 16/27 (Avalon) to Total.
In June 2017, Providence announced that it and Sosina Exploration Limited (“Sosina”) had signed a Farm-in Agreement (“FIA”) with Total whereby the French oil giant would take a 50% working interest and operatorship in LO 16/27, subject to Ministerial approval.
Under the terms of the FIA, Total will pay its pro-rata share of past gross costs of c. $0.175 million.
In addition to its pro-rata share, the company will also pay 21.4% of the past and future costs during the two-year term of LO 16/27, subject to a gross cost cap of $1.33 million.
In the event that the joint venture partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, Total will pay 60% of the drilling costs, subject to a gross well cap of $ 42million.
With the farm-in now completed, the revised equity in LO 16/27 is Total (operator – 50%), Providence (40%) and Sosina (10%).
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