Providence raises stake in oil field
SHARES in Providence Resources soared yesterday after the company said it had upped its stake in an oil discovery off south-east Ireland that may contain nearly 400 million barrels of oil.
The oil and gas explorer has increased its holding in the Barryroe Discovery in the Celtic Sea by two-thirds to 50pc, and assumed the operation of the discovery. In exchange for taking the stake off Lansdowne Oil and Gas, Providence has granted Lansdowne a 10pc stake in its Helvick oil field.
Barryroe was originally discovered by Exxon in the early 1970s but has never been developed because of oil impurities and poor seismic data.
An audit of the discovery using new technology, however, has found the site to have a minimum of 373 million barrels of oil equivalent with a possibility of nearly 900 million.
Providence technical director John O'Sullivan said higher oil prices had made developing Barryroe viable.
"The oil from it is quite waxy, which requires more work and capital expenditure when it comes to processing. The barrels need to be kept warm in order to prevent the wax freezing, for example," he said.
"Back in the early 1970s when Exxon and Marathon Oil made the discovery, they did not develop it because the low oil price and large conventional discoveries in the North Sea meant they did not need to. With oil at the $80 mark now, however, it is much more viable for us to develop the site."
By the close of trading in Dublin, Providence was up nearly 9pc at €3.05. In London, the stock was up a similar amount at 257p.