Providence surges on licence offer
Published 13/01/2012 | 05:00
SHARES in Providence Reso- urces jumped to their highest levels in nine months yesterday after it was offered an exploration licence off Wales.
The shares soared 18pc trading in Dublin yesterday, but later closed up 6.5pc at €2.80.
"The licence award opens the way for Providence to proceed with an appraisal well in the coming year and today's news helps to progress the drilling of the prospect," said Job Langbroek, an analyst at Davy.
Providence bid for the licence in the St George's Channel Basin together with Star Energy Oil & Gas. Each company will hold a 50pc stake.
The block contains Marathon Oil's undeveloped Dragon gas discovery and is next to the Providence-operated license SEL 1/07 which is in Irish waters.
This means it will be relatively easy for Providence to drill an appraisal well.
"Dragon is part of a multi-well offshore Ireland drilling programme," Mr Langbroek added. "This starts with the results of the Barryroe well in the Celtic Sea, expected in the coming weeks." Davy is to value the stock at 919p a share, more than three times higher than the current price on the London stock exchange.