Providence chief says board must decide his future
PROVIDENCE Resources chief executive Tony O'Reilly Jr still believes a $9m (€8.1m) loan will be forthcoming from Chinese investors despite months of delays.
And he insisted he does not see any immediate reason why he should resign. He said a decision on his future at the embattled oil exploration firm should be left to the Providence Resources board.
Please log in or register with Independent.ie for free access to this article.
The company has tapped its institutional shareholders for $3.76m to keep it afloat until February, due to the delay in receiving the funds from Chinese firm APEC which are meant to be used to help fund development of Providence's Barryroe oil prospect off the Co Cork coast.
The share placing is scheduled to complete on October 1.
"Some shareholders question whether I should still be at the business," said Mr O'Reilly after the Providence annual general meeting in Dublin yesterday, where he noted the firm is "in survival mode".
"But for the here and now, to protect the company, to protect the asset, I need to do the business and deliver the placing," he said.
He said the company could also be a takeover target given its difficulties.
Pressed on whether he will consider his own position at the company, where he has been for 22 years, Mr O'Reilly said "everything" could be discussed.
"I'm not suddenly going to put up red flags and say exactly what I'm going to do, but we'll see," he said.
He also defended his €470,000 pay package for 2018, even as the company has cut jobs and is planning to slash its cost base to $1.9m a year.
Of the $3.76m that will be raised, $430,000 will be used to cover the fundraising expenses, while $750,000 is earmarked for "re-engineering of the company's business model". Just over $2.5m will be used to fund general working capital needs and licence operating costs. It added that $500,000 will be used for the site survey at Barryroe, which is predicted to hold 311 million barrels of recoverable oil.
Mr O'Reilly said it was incredible that the money from APEC had not yet been received by Providence and denied the firm had been taken for a mug. He also said that there has been interest from other parties working in the Barryroe site.
"Nobody looks like heroes in this," he said.
Mr O'Reilly said APEC had been informed last week of the planned fundraising, and said he believed the Chinese firm now felt "a bit ashamed" that Providence had been forced to raise cash from shareholders because of the delay in receiving the APEC loan.
He said APEC also tried to persuade Providence not to raise the equity.
APEC entered into an agreement with Providence last year which saw the Chinese firm take a 50pc stake in Barryroe, with Providence holding 40pc and Lansdowne owning 10pc.
Providence's shareholders include businessman Nick Furlong's Pageant Holdings, Blackrock, M&G Investment Management and Goldman Sachs. It has a market capitalisation of €35.8m.
Mr O'Reilly said he understood why people could be "bearish" about Providence.
"They shouldn't be," he said. "We have faced tough times before, and we have been knocked down, but we've always got up.
"The low point today is our floor, from which we can and will build."