Irish oil and gas firm Providence Resources is selling its US oil and gas portfolio in the Gulf of Mexico to Dynamic Offshore Resources for up to $22m.

Total current production from Providence’s Gulf of Mexico portfolio amounts to approximately 700 barrels of oil equivalent per day.

The proceeds of the sale will be used to reduce the company’s reserve backed lending facility with BNP Paribas.

The sale will also allow Providence to concentrate on its multi-basin drilling program offshore Ireland and on its ongoing investment program at the Singleton field in the UK.

Dynamic Offshore will make an initial cash payment of $15m and an additional $7m deferred cash payment, which is dependent on the company reaching certain production levels from any new wells drilled on Ship Shoal 252, 253 and 267 blocks prior to January 2013.