Oil and gas company Providence Resources said Spanish oil group Repsol has farmed into Providence Resources Irish licence.

As part of the deal, Repsol's Irish subsidiary will acquire a 25 per cent equity interest in the Dunquin licence, taking 12.5 per cent from Italian energy group Eni and the remainder from ExxonMobil Exploration and Production Ireland.

This will leave ExxonMobil and Eni with a 27.5 per cent interest each in the licence. Providence and Sosina will have 16 per cent and 4 per cent respectively.

Dunquin covers five blocks in the South Porcupine Basin, about 200km off the South West coast of Ireland, .

Davy estimated that Repsol's financial commitment could be up to $50 million.

"The competitive fiscal terms offshore Ireland and the favourable location have undoubtedly achieved what they intended – to get high risk projects drilled off the west coast of Ireland," Davy analyst Job Langbroek wrote in a note.

"Providence shareholders should welcome this development as a useful validation by the industry of the target and further evidence of a growing interest in the Atlantic margin play in which Providence has a pre-eminent position."