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Providence agrees placing for $65m to drill off Irish coast

PROVIDENCE Resources, the Irish-focused oil and gas company, agreed the terms of a share placing to raise about $65m (€48m) to help pay for the largest-ever drilling programme undertaken in Irish waters.

Providence placed more than 16 million shares as the company begins a multi-well, multi-year drilling programme which may cost Providence as much as $120m and lead to $500m being spent in Irish waters. The placing was more than two times over-subscribed. About two-thirds of the money will be spent to drill appraisal projects while the rest will be spent looking for further exploration prospects.

Providence is hoping to succeed in the Irish Sea where many rivals have failed. The company plans to begin extracting oil and gas from six different areas around Ireland including a basin off Hook Head, one off Dalkey Island and two off the Burren. The first oil and gas is expected to come onshore in 2013 or 2014.

Drilling begins this summer in the Celtic Sea at two appraisal wells at Barryroe and one appraisal well at the Hook Head.

The placing was done at €3.03 and shares closed 9.6pc higher at €3.07 in Dublin yesterday to give the company a market value of €103.5m. The move must be agreed at a shareholder meeting on March 11.

Indo Business