Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Providence Resources and Lansdowne Oil & Gas shares soar as Barryroe excitement resurfaces

ICYMI: An unnamed potential new partner is now in exclusive contract negotiations which could finally see a farm-out deal for Barryroe
oil and gas operations
The Irish oil juniors have doubled in value since last week's encouraging farm-out news

In case you missed it, Irish oil explorers Providence Resources PLC (LON:PVR) and Lansdowne Oil & Gas Plc (LON:LOGP) shares were boosted over the holiday period, as they appeared to move closer to a pivotal new partnership for the Barryroe oil field.

Barryroe is a significant oil project, with more than 1bn barrels of crude potentially present and production volumes projected at around 100,000 barrel per day but for several years the pre-development project has stalled.

READ: Providence Resources and Lansdowne Oil & Gas closer to Barryroe farm-out with signing of exclusivity deal

Put simply, the project would be too big and too expensive for Providence and Lansdowne to take forward into production alone.

They have been seeking larger partners, with deeper pockets, ever since the breakthrough well success back in 2012, though the initial optimism was dented by the collapse of crude prices from highs above US$100 per barrel.

As capital budgets tightened across the sector, the prospect of new commitments to new expensive growth projects became increasingly unlikely, and thus investors in companies such as Providence became increasingly frustrated.

Now, however, crude prices are looking healthier (with Brent now staying comfortably above US$60) and many of the ‘financially reset’ larger oil firms are again seen to be interested in taking new projects.

Exclusive farm-out talks now advancing

On Thursday, December 28, Providence revealed that it had signed an exclusivity agreement with an unnamed potential partner for Barryroe.

This was taken as particularly significant news, as Providence added that ‘key commercial terms’ had been agreed with the possible farminee and the exclusivity period would allow negotiations to advance in order to conclude contractual negotiations.

If sealed, the partnership deal would deliver a multi-well programme at Barryroe, according to Providence chief executive Tony O’Reilly.

The news lit a rocket beneath the share prices of Providence and Lansdowne.

Having risen a further 31% on the first trading day of January to change hands at 11.5p, Providence is now up almost 100% since Thursday’s announcement, whereas, Lansdowne is up some 130% in the same period, rising to trade at nearly 2p per share in early Tuesday deals.

New Barryroe drilling in the books potentially for 2018

Providence also updated on its preparations for new drilling at Barryroe. Thursday’s statement confirmed that “various work-scopes for the planned drilling” had now begun.

“These work-scopes include well planning and consenting, together with the preparation of the invitation to Tender (ITT) for the procurement of a drilling unit, which it is planned to issue in early Q1 2018,” Providence said.

Drilling itself could potentially start in late 2018 or early 2019.

Providence holds 80% of Barryroe and it is presently the operator of the project, while Lansdowne owns the other 20%.

As those that have followed the Barryroe story closely will know, we’ve been here before with this project – this is not the first time that a game changing Barryroe transaction has been understood to be ‘incoming’ – nonetheless, with new drilling already funded and being scheduled by Providence there is now a sense of renewed optimism among investors.

View full PVR profile View Profile

Providence Resources PLC Timeline

Related Articles

Offshore oil operations
April 03 2018
United is growing its oil and gas business through relatively low-risk assets in Europe, meanwhile, big-bang exploration offshore Jamaica could prove to be a game changer
oil and gas operations
July 20 2018
“To open up the well and have clean oil come to surface with no water meant the Gatwick Gusher gushed again – a lot earlier than we thought,” Lenigas said in exclusive interview with Proactive Investors’ Andrew Scott.
man leaving office
July 19 2018
“As we reach the point of monetising the first round of core assets, I think it is appropriate that a refreshed team be appointed to take Solo forward into the next phase of its corporate development”

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use