Oil and gas exploration firm Providence Resources said it was continuing discussions on a farm-out of the Barryroe oil field, and was considering a proposal from an alliance of contractors.

The company revealed its plans in an update on its operations in the Celtic Sea Basins off the coast of southern Ireland.

The alliance would include a major rig operator, drilling management and well service company, the firm said, with costs for drilling an appraisal well around £16 million.

Providence chief executive Tony O’Reilly said the farm-out remained the company’s primary focus.

“Despite the difficult operating environment, Providence has continued to progress its activities across its portfolio of assets in the Celtic Sea basins,” he said.

In the update, the company said an Evaluation of the upper gas bearing C-Sand reservoir at Barryroe confirms significant productivity and resource potential.

The Helvick oil discovery and the Dunmore oil discovery, both in the North Celtic Sea Basin, have a two-year lease undertaking with effect from March 1st, the next pre-development steps.

“Whilst Helvick and Dunmore are relatively small oil accumulations, the work completed to date has illustrated that the fields could be commercially developed due to both the highly productive nature of the main reservoir intervals as well as the current low development CAPEX,” Mr O’Reilly said in a statement.