Providence losses fall as UK production rises
PROVIDENCE Resources said losses narrowed last year as a UK find that produced more oil and gas helped offset a fall in production in the Gulf of Mexico where a hurricane hit output.
Net losses fell to €9.8m last year from €51.2m the previous year, the company said. Losses in 2008 were inflated by a once-off writedown on assets. Sales fell to €21.1m from €24.8m as oil prices declined.
Despite the fall in sales, total annual production rose 28pc to 557,927 barrels as the company's Singleton field in the UK made up for problems in the Gulf of Mexico. The company also has projects in Ireland and Namibia as well as the UK and US.
"The Providence business model is based on managing a suite of assets in the oil and gas industry with a view to diversifying and creating a mix of value-add opportunities," said Davy Stockbrokers analyst Joe Langbroek. "Progress was reported on most fronts."
Providence's full-year results follow a slew of positive announcements this year about the company's activities in Ireland and the UK, including new drilling programmes in Dunquin off the west coast and the discovery of a new field off the east coast.
"Looking ahead, 2010 is a key year for Providence with a number of projects now advancing to the drilling stage," chief executive Tony O'Reilly said yesterday. "We are also continuing to look at future opportunities that can deliver appreciable value creation, both in Ireland and further afield."
The average oil price per barrel in 2009 was $88.23 compared with $111.07 in 2008, Providence said yesterday. Average gas prices were half last year's levels.
The group had borrowings of €80m at the end of 2009 with the majority of this a loan facility from BNP Paribas. After the year-end, the group raised €16.3m by way of an equity issue.