Business Irish

Sunday 20 January 2019

Losses decline at Providence, Barryroe agreement now includes an advance of $19.5m

Barryroe drilling operation
Barryroe drilling operation
Ellie Donnelly

Ellie Donnelly

Irish oil and exploration company Providence Resources has reported an operating loss of €2.2m in the six months to 30 June.

This is reduction on the €3.9m loss reported for the same period last year, according to a trading update from the group.

Loss per share was 40 cents.

The performance comes on the back of what Tony O'Reilly, CEO of Providence, described as an "an exceptionally busy period" for  the group, where it focused on completing the Barryroe farm-out with APEC, advancing other exploration assets within its portfolio, as well as "working with various stakeholders to advance Ireland's National Energy Policy."

As at 30 June this year, total cash and cash equivalents were €12.3m, a considerable reduction in the cast and cash equivalents of €36.4m at June 30, 2017.

The company had no debt at June 30, 2018.

Providence also today announced that, having received governmental approval, it has amended its farm-in agreement with a group of Chinese companies led by APEC Energy Enterprises.

The agreement comprises of the drilling and testing of four vertical wells and one horizontal sidetrack, plus the optional drilling of two additional horizontal wells.

The farm-in agreement now also includes an advance of $19.5m to Providence, with $9m of this effective immediately, and the balance prior to the start of drilling.

The group expects drilling to commence in the second quarter of 2019.

Describing the drilling programme as a "significant" step forward for Barryroe, Mr O’Reilly said it is designed to provide modern dynamic data that will assist in the field development to production. 

"Importantly, the structure of the farm-out transaction means that Providence has no upfront risk or capital exposure for the drilling programme, whilst also providing a roadmap to take this project, subject to the results of the drilling and regulatory consents, to project sanction and then on to production."

"Notably, Barryroe would be Ireland's first commercial oil field development, which in tandem with Corrib, would further facilitate national energy independence at a time of growing geopolitical risk within global energy markets," Mr Reilly added.

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