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Providence shares drop after new funding announcement


The Providence rig at Barryroe, off the west Cork coast.

The Providence rig at Barryroe, off the west Cork coast.

The Providence rig at Barryroe, off the west Cork coast.

Shares in Irish oil and gas explorer Providence Resources were down almost 13pc yesterday afternoon after the company said it was looking to raise around €28m in extra funding.

The company headed by Tony O'Reilly Jr said it would use the money to cover general business costs, payments associated with a lawsuit taken against the company, and costs arising out of Providence's recent acquisition of another chunk of the Spanish Point field off the west coast.

Mr O'Reilly said "delays to certain planned events" was one of the reasons why the fundraising was necessary.

Earlier this month the company said it has found a partner to help get oil out of the seabed at its flagship asset off the Cork coast, but didn't name the partner, saying the deal is conditional on thatpartner raising its own funds.

Mr O'Reilly said that if the fundraising goes ahead, it would broaden Providence's "already strong institutional shareholder base".

"This financial restructuring now allows the company to move forward with activities on its diverse asset portfolio," he added.

The fundraising is conditional on shareholder approval, amongst other things.

Davy analyst Job Langbroek said the funding issues "should not take away from the value in the assets that the Providence is attempting to realise".

Providence shares have dropped over 85pc in the past year amid oil price turmoil and delays.

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