Shares boost for Providence after discovery of gas prospect
SHARES in the oil and gas explorer Providence Resources soared yesterday, after the company said it had found a "significant" gas prospect off the Irish coast.
By late afternoon, the stock was up nearly 10pc at €1.97, following the discovery of the "Marlin" exploration prospect, which is located some 10km northwest of the Kinsale Head gas field in the Celtic Sea.
It could have a total resource potential of 74 billion standard cubic feet of natural gas, says Providence.
Providence owns 60pc of the licensing option where the field is located, and operates it on behalf of the UK company Nautical Petroleum, which owns the remainder.
During the course of a study of the area carried out by Nautical, it was found that the field extended beyond the licensing option Providence currently has.
As a result of this, Providence said it had applied to Communications Energy and Natural Resources Minister Eamon Ryan for an extension of the area covered by the option.
Providence's Technical Director, John O'Sullivan, said the proximity to the Kinsale Head field was a key advantage for the prospect.
"We are excited about this new exploration prospect as it is in the same geological setting as other proven producing fields in the region and it is very close to the Kinsale Head production facilities.
"In particular, the Marlin prospect demonstrates striking similarities to the nearby Ballycotton gas field, which is a highly successful offshore development," he said.
Caren Crowley, an analyst with Davy stockbrokers, welcomed the news but warned that production was still a long way away.
"The Marlin prospect has the potential to add value over time," she said. "The next step in the value creation chain is the conversion of the licence option to a licence which would include a commitment to drill," she added.