Exploration company Providence this morning said its subsidiary Eirgas is to acquire a 40 per cent stake in the Kinsale Head gas fields from Petronas International.
The deal will double Providence's attributable daily production to over 4,000 barrels of oil equivalent per day (boepd).
Petronas bought the Kinsale Head assets, which include Kinsale Head, South West Kinsale and Ballycotton
gas fields, from Marathon Oil Corporation in April for $180 million.
Providence has already paid $3.8 million to Petronas. The balance will be paid upon completion of the deal, which is subject to regulatory approval, financed by existing cash resources and banking facilities.
"This transaction allows Providence to capitalise on our extensive operational experience offshore Ireland in combination with Petronas' proven track record in gas production, storage and trading," said chief executive Tony O'Reilly.
"Upon completion, not only will Providence's attributable daily production double to over 4,000 boepd, but we will also gain exposure to existing and new gas storage and trading opportunities, which we see as a huge potential future growth area for the company. Additionally, the deal also provides Eirgas with an opportunity to potentially monetise gas from some of Providence's adjacent gas discoveries in the Celtic Sea, as well as from third party fields."
The deal is expected to be closed by the end of the first quarter of 2010.
Eirgas has also exercised its option to take a 40 per cent stake in the Seven Heads gas field.
Eirgas was set up by Providence to invest in gas production, storage and trading opportunities offshore Ireland and in the United Kingdom.