Providence shares jump as losses narrow and revenues increase
SHARES in Providence Resources climbed by as much as 5pc yesterday, after the company narrowed losses and increased revenues.
The exploration company had a pre-tax loss of €5.2m last year as revenue climbed by a quarter to €13m. The company now has accumulated losses of €13.9m.
Companies like Providence, which are focused on exploration rather than actual production at this stage, rarely have high revenues, but sales tend to spike dramatically once the company starts to produce commercial quantities of oil and gas.
Providence chief executive Tony O'Reilly said the business had performed strongly last year and described 2011 as a transformational one for the company.
"The company made great strides across all of its operations, from the quality of its portfolio to the strength of its balance sheet. During the year, we streamlined our operations by divesting our assets in the Gulf of Mexico as well as in Nigeria, reduced debt levels by over $30m (€23m).
"The company has also remained focused on pushing recovery and production rates at the Singleton oilfield, onshore UK," he added.
Providence has now scheduled drilling on the Kish Bank prospect off Dalkey Island for the fourth quarter of this year.
Another five wells will be drilled in 2013. The company also hopes to drill the Barryroe discovery off Cork, where large quantities of oil were found last March, before the end of 2015.
Davy Stockbrokers' Job Langbroek welcomed the results.
"Much work has been done to reduce debt and what remains is reserve-based.
"Consequently, Providence is now funded for its ongoing activities. The Barryroe well was a significant success and work continues to develop a commercial development proposition.
"Shareholders have the results of this work to look forward to by the end of the year and then up to five wells in 2013 with two very important wells along the Atlantic margin," he added.
Providence finished yesterday up 1.56pc at €6.50.