Tuesday 25 September 2018

Farm-outs boost Providence Resources despite losses

Barryroe drilling operation
Barryroe drilling operation
Ellie Donnelly

Ellie Donnelly

Irish oil and exploration company Providence Resources has reported an operating loss of €21m for 2017, an increase on the loss of €18.8m reported for 2016.

The losses include a €14m impairment from exploration and evaluation activities.

At the end of 2017 the company had total cash and cash equivalents of €19.6m, versus €31.4m at the end of 2016.

The company also had no debt at the end of the year. Shares were up 1.65pc yesterday, after the news.

In 2017, Providence agreed three major exploration farm-out transactions, which provided "significant momentum" to its portfolio development activities, and also delivered incremental capital to enhance its financial resources, the company said.

In addition, it has signed an appraisal farm-out transaction with a Chinese-led consortium, which provides it with the financial and operational capacity for the appraisal and development of its flagship Barryroe Project in the Celtic Sea.

CEO Tony O'Reilly said that the company's main operational activity in 2017 - an exploration well targeting the Druid and Drombeg exploration targets, had been "very disappointing".

However, farm-outs with Total and Cairn substantially mitigated the company's exposure to the drilling programme, he said.

Irish Independent

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