As part of the same transaction, Eirgas has also exercised the option to acquire a 40% interest in the 86.5% operated adjacent producing Seven Heads gas field.
Under the terms of the option agreement, which was originally entered into on June 15, 2009, Eirgas will purchase its stakes in the Kinsale Head Area assets on the same pro-rata terms by which Petronas acquired its stake from Marathon Oil Corporation in April 2009.
That transaction had a total value of $180m, with an effective date of January1, 2008. In conjunction with the formal notification of its exercise of the Option, Providence has made an initial cash payment of $3.8m to Petronas with the balance due at closing.
The closing of the transaction is subject to Irish regulatory approval and is expected to be completed by no later than the end of the first quarter of 2010. It is planned that the financing for the balance of the transaction will be met through existing cash resources and banking facilities, said Providence.
Tony O’Reilly, chief executive of Providence, said: “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.
“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.”
Eirgas is a special purpose vehicle established to invest in gas production and storage opportunities offshore Ireland and in the UK.
