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Providence Resources position “much improved” by funding, broker says

Last updated: 14:15 26 Mar 2015 GMT, First published: 15:15 26 Mar 2015 GMT

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Investors should stick with Providence Resources (LON:PVR), says City broker Liberum Capital.

The Irish oil group could unlock significant value with a deal to farm-out a portion of the Barryroe project and a recent share placing has left the capital instruction “much improved”, analyst Jean-Pierre Dmirdjian said in a note.

Dmirdjian today repeated a ‘buy’ recommendation and brought the broker’s target price up to date, setting it at 82p per share.

His previous target was 648p but that was some time ago and before the oil price slumped and farm-out talks have proved prolonged.

This new valuation takes into account the new lower price oil environment and dilution, the analyst explained.

“The capital structure is much improved after the placing. It allows management to focus on the execution of the strategy offshore Ireland, the first step of which being the successful Barryroe farm-out,” he said in a note.

“This has been challenged by the unsupportive environment, but discussions are ongoing.”

Providence Resources CEO Alan Scott Linn presents at the Proactive One2One...

Providence Resources CEO Alan Scott Linn presents at the Proactive One2One Virtual Forum. Providence Resources is an Irish based Oil and Gas Exploration Company with a portfolio of appraisal and exploration assets located offshore Ireland. Providence’s shares are quoted on the AIM in...

on 26/10/20