https://www.proactiveinvestors.co.uk Proactiveinvestors RSS feed en Tue, 16 Oct 2018 16:02:37 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Providence Resources growing in confidence over its Newgrange prospect ]]> https://www.proactiveinvestors.co.uk/companies/news/207058/providence-resources-growing-in-confidence-over-its-newgrange-prospect-207058.html Providence Resources PLC (LON:PVR) has had encouraging reports concerning frontier exploration licence (FEL) 6/14 situated some 260 kilometres off the south-west coast of Ireland.

FEL 6/14 contains the Newgrange prospect, where a site survey was conducted in July, followed up by the acquisition of seabed samples that have now been independently analysed for the presence of hydrocarbons.

READ: Providence Resources buoyed by Newgrange survey

Geochemical analysis of seabed samples acquired during this programme has confirmed the presence of both biogenic and thermogenic hydrocarbon sourcing signatures indicating that 262-seabed pockmarks identified in the site survey are possibly related to hydrocarbon migration.

In addition, high-resolution sub-bottom two-dimensional (2D) data analysis has revealed buried pockmark fields up to around 100 metres beneath the seabed possibly indicating active hydrocarbon migration over a prolonged period.

Providence said discussions with third parties that are interested in taking a stake in the field are continuing. Depending on the outcome of these discussions, drilling could take place in either 2019 or 2020 (subject to regulatory consent). The latest internal well cost estimate is less than US$15 million, exclusive of mobilisation.

"The quantum of current seabed pockmarks, together with the positive geochemical analyses, support the presence of potential active source rocks in the area that could be charging Newgrange with either liquids or gas,” asserted Dr John O’Sullivan, the technical director at Providence Resources.

“In addition, the presence and extent of the buried pockmark fields attest to the longevity of these potential sourcing systems, confirming that they are not just a present-day phenomenon. Whilst Newgrange is frontier in nature, the material prospective resources and low drilling cost continues to attract industry interest and we believe that these new technical data should serve to further bolster that enthusiasm," he added.

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Mon, 15 Oct 2018 08:23:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/207058/providence-resources-growing-in-confidence-over-its-newgrange-prospect-207058.html
<![CDATA[News - Providence Resources names Angus McCoss as senior independent director ]]> https://www.proactiveinvestors.co.uk/companies/news/206359/providence-resources-names-angus-mccoss-as-senior-independent-director-206359.html Providence Resources PLC (LON:PVR) told investors that Dr Angus McCoss has now been appointed as the company’s senior independent director with immediate effect.

McCoss, Tullow Oil plc’s (LON:TLW) exploration director, joined the Providence board as non-executive director back in June 2017.

READ: Providence Resources tipped for huge upside ahead of Irish well programme

"We are delighted that Angus is taking on the role of senior independent director and are confident that he will bring the same wealth of experience to this position as he has provided to the board since joining in 2017," said Pat Plunkett, Providence chairman.

Barryroe’s path to production starts with 2019 appraisal

In September, Providence signed a binding partnership deal with APEC, detailing a path to production for the Barryroe oil field off Ireland’s south coast.

It starts with an appraisal programme next year.

Together Providence, APEC and Lansdowne Oil & Gas Plc (LON:LOGP) will initially drill four new vertical wells and one horizontal sidetrack. APEC then has an option to extend the programme, to add a further two horizontal wells.

In the current quarter, operations are being advanced to survey the proposed well sites. Rig mobilisation will begin in the second quarter of 2019 thus setting in motion a programme that, if successful, Barryroe will become Ireland’s first commercial offshore oil project.

Providence and Lansdowne’s share of the programme costs are to be covered by a non-recourse funding facility, whereby Chinese funds will be provided and later returned through accelerated repayment (basically, the partner will receive a larger share of the early revenues).

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Thu, 04 Oct 2018 07:42:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/206359/providence-resources-names-angus-mccoss-as-senior-independent-director-206359.html
<![CDATA[News - Providence Resources tipped for near 200% upside ahead of pivotal Irish well programme ]]> https://www.proactiveinvestors.co.uk/companies/news/206315/providence-resources-tipped-for-near-200-upside-ahead-of-pivotal-irish-well-programme-206315.html In the wake of a breakthrough partnership deal for the Barryroe project in Ireland’s Celtic Sea, Providence Resources PLC (LON:PVR) has been tipped for very substantial value creation.

A ‘buy’ recommendation from stockbroker Mirabaud Securities comes with an upgraded 50p price target (up from 33p), suggesting nearly 200% upside to the explorer’s current price of 17.5p.

Mirabaud analyst James Midgley described Providence’s new deal with Chinese partner APEC as “a major step” closer to the commercialization of Barryroe - a 350mln barrel field that’s barely being valued at its AIM share price.

Current price barely prices in cash ‘n’carry

“Still, at today’s share price Providence trades only marginally above the value of its net cash, plus capex carry (totalling c.14p/shr),” Midgley said in a note.

“Accordingly, we consider the company to be in an almost unique position, offering deep value but with a clear roadmap to commercialisation, and further upside in the way of multi-billion barrel exploration alongside Major oil companies.”

Midgley highlighted that the new 50p per share target still represents a 50% discount to the broker’s core net asset valuation for Barryroe - in other words, the broker’s core valuation actually prices the firm at around 100p.

READ: Countdown starts for Barryroe as Providence inks binding partnership deal

Beyond the core valuation, which focuses primarily on Barryroe, the analyst's total asset valuation also includes 40p of what’s described as “heavily risked” value for the Dunquin South and Newgrange prospects, located in Ireland’s Atlantic Margin, off the west coast.

For the market’s more speculative punters, it is probably worth noting that on an un-risked basis Midgley values the Barryroe stake at 152p while Dunquin South and Newgrange are ascribed values of 193p and 282p respectively. Mirabaud’s total, un-risked valuation sees the company worth 631.2p.

Providence, meanwhile, retains a material acreage position in the west coast frontier from which further exploration possibilities may be unearthed.

Yet more upside for Providence?

“At under 20p per share, Providence shares are clearly trading at a substantial discount to where we consider fair value,” the analyst said.

“While we expect the shares to trend towards the 100-140p per share mark, realistically we consider this a medium-term objective.

“Accordingly, for now, we are recommending a near-term 50p per share target price, on the basis that we will reconsider as we approach the start of next year’s (Q2) drilling campaign.

“We would add that this target price offers nothing for Providence’s exploration position, which we consider one of the most prospective in the sector. Any progress in readying prospects for drilling could see the share price, and our target price, upgraded accordingly.

Putting Barryroe on the path to production

September’s binding partnership deal with APEC detailed a path to production, starting with an appraisal programme beginning next year.

Together Providence, APEC and Lansdowne Oil & Gas Plc (LON:LOGP) will initially drill four new vertical wells and one horizontal sidetrack.

APEC then has an option to extend the programme, to add a further two horizontal wells.

In the current quarter, operations are being advanced to survey the proposed well sites.

Rig mobilisation will begin in the second quarter of 2019 thus setting in motion a programme that, if successful, Barryroe will become Ireland’s first commercial offshore oil project.

Providence and Lansdowne’s share of the programme costs are to be covered by a non-recourse funding facility, whereby Chinese funds will be provided and later returned through accelerated repayment (basically, the partner will receive a larger share of the early revenues).

Post-appraisal development funding will be in focus

“The firm appraisal programme is expected to take some 200 days excluding testing, meaning that by early 2020, the partners should have gathered sufficient data to make a final investment decision and lodge a field development plan,” Mirabaud’s Midgley said.

He added: “assuming the horizontal well options are exercised, three wells will be already be drilled awaiting tie-in, meaning the bulk of the initial capex requirement will be on facilities (e.g. subsea manifolds - note we assume that the FPSO will be leased), which we estimate will cost in the region of US$250-500m (gross).

“With Providence retaining a 40% stake in the field, its share of upfront development capex would be just US$100-200m.”

According to Midgely, Providence will have a number of options open to it - including reserves based lending, an extension of the APEC financing arrangements, or a further farm-down of Barryroe project equity.

Providence is plainly on the cusp of a very active and catalyst rich period.

Based on the present share price plus Mirabaud’s target and valuation there’s, evidently, the potential for a great deal of upside available for investors.

All eyes will be on next year’s drilling.

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Wed, 03 Oct 2018 14:44:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/206315/providence-resources-tipped-for-near-200-upside-ahead-of-pivotal-irish-well-programme-206315.html
<![CDATA[News - “Very exciting time” for Providence Resources as it gears up for Barryroe drilling in Q2 2019 ]]> https://www.proactiveinvestors.co.uk/companies/news/205760/very-exciting-time-for-providence-resources-as-it-gears-up-for-barryroe-drilling-in-q2-2019-205760.html The boss of Providence Resources PLC (LON:PVR) has said it is a “very exciting time” for the explorer after it signed an updated farm-out deal with its Chinese partners at the Barryroe oilfield offshore Ireland.

Chief executive Tony O’Reilly talked about the deal, which ought to tee Barryroe up for production, in an interview with Proactive Investors.

READ: City broker approves of Barryroe deal

“[The partnership and funding deal] puts Barryroe on a pathway to production which is ultimately what we’re all about as an oil and gas company,” said O'Reilly told Proactive.

To earn its 50% interest into what will be Ireland’s first commercial offshore oil project, APEC has committed to funding a programme of four vertical wells and one horizontal sidetrack.

Drilling at the project, which has an audited resource of 350mln barrels of oil, is due to start in the second quarter of 2019, with the aim of validating Barryroe as a producing field.

“We’re going to drill four vertical wells plus an extended horizontal well which will allow us to fully appraise the Barryroe field,” the Irishman added.

“It is our flagship asset so we’re looking to take it from the appraisal stage through to pre-development and onto production. It’s a big step up for the asset.”

Between now and the start of drilling, O’Reilly said most of the company’s efforts would go towards getting all the necessary consents and permissions which would allow the drill bits to start turning.

As well as delivering the 200-day drill programme, APEC is also giving Providence a US$19.5mln cash advance to cover project and operational costs.

“We’re in a great [financial] position,” said O’Reilly.

“We have over €12mln in cash plus receivables coming in, no debt and we have no working capital requirements for the next few years.”

Providence shares rose 0.3% to 15p in early afternoon trading. They have now gained almost 50% since the start of the month.

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Wed, 26 Sep 2018 13:05:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/205760/very-exciting-time-for-providence-resources-as-it-gears-up-for-barryroe-drilling-in-q2-2019-205760.html
<![CDATA[Media files - Providence Resources eyes up multi-billion barrel exploration targets ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/10585/providence-resources-eyes-up-multi-billion-barrel-exploration-targets-10585.html Tue, 25 Sep 2018 23:10:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/10585/providence-resources-eyes-up-multi-billion-barrel-exploration-targets-10585.html <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180925164023_13804300/ Tue, 25 Sep 2018 16:40:23 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180925164023_13804300/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180925163516_13804289/ Tue, 25 Sep 2018 16:35:16 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180925163516_13804289/ <![CDATA[News - Providence Resources' deal for Barrymore should lead to share price recovery suggests broker ]]> https://www.proactiveinvestors.co.uk/companies/news/205359/providence-resources-deal-for-barrymore-should-lead-to-share-price-recovery-suggests-broker-205359.html The starting gun has fired on Providence Resources PLC (LON:PVR) Barryroe oil field development after the sign-off of a farm-out deal with its new Chinese partners.

Final agreement to allow the farm-in of APEC Energy into the licence (SEL 1/11) will provide not only a much-needed cash resources but also a fillip for shareholders, said SP Angel.

“We expect to see share price appreciation as news of the planning stages indicates the approach of the drilling stages of the appraisal programme.”

Ireland’s first commercial project

Barryroe will be Ireland’s first commercial offshore oil project, though the immediate focus will be on preparations for a new drilling programme slated to start next year.

Specifically, the now binding deal commits the Chinese partners to carry Providence and Lansdowne Oil & Gas Ltd (LON:LOGP) for a programme of four vertical wells and one horizontal sidetrack plus the option to extend the programme with a further two horizontal wells.

Also, significantly, the deal comes with a US$19.5mln cash advance to Providence covering project and operational costs – US$9mln will be released initially, with a further US$10.5mln will be paid 14-days prior to the start of drilling.

A survey of the proposed well sites will now be advanced in the fourth quarter of this year, setting up a timeline for rig mobilisation during the second quarter of 2019.

“The finalisation of these binding farm-out terms with APEC is transformational for Providence,” said chief executive Tony O’Reilly. 

“Importantly, the structure of the farm-out transaction means that Providence has no upfront risk or capital exposure for the drilling programme.”

Loss reduced

In terms of financials, the pre-revenue explorer reported a €2.37mln loss for the six-month period, compared to a €3.44mln loss for the same period a year ago.

Providence had €12.35mln of cash and no debt at the end of the period.

Dunquin, Druid and Drumbeg

Elsewhere Providence has completed another 3D seismic shot of its Dunquin South prospect, in the Porcupine Basin, offshore Ireland.

Providence owns a 26.8% stake in FEL 3/04, which hosts Dunquin South, with its partners in the venture Eni (operator), Repsol, and Sosina Exploration.

Providence is also exploring Druid and Drumbeg, two big exploration targets located within Frontier Exploration Licence (FEL) 2/14, in the Atlantic Margin off Ireland’s west coast.

FEL 2/14 lies in 2,250 metres of water in the southern Porcupine Basin some 220 kilometres off

Druid and Drombeg are, on paper, estimated to be very large with the former modelled at 3.1bn barrels of mean oil resources and the latter estimated to have 1.9bn barrels.

Providence also recently received results from a seabed survey of the Newgrange Prospect (FEL6/14).

Newgrange is contained within Frontier Exploration Licence 6/14, 260km off south-west Ireland and sits beneath 1,000 metres of water.

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Thu, 20 Sep 2018 14:01:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/205359/providence-resources-deal-for-barrymore-should-lead-to-share-price-recovery-suggests-broker-205359.html
<![CDATA[News - Providence Resources starts countdown for Barryroe drilling as it inks binding partnership deal ]]> https://www.proactiveinvestors.co.uk/companies/news/205302/providence-resources-starts-countdown-for-barryroe-drilling-as-it-inks-binding-partnership-deal-205302.html Providence Resources PLC (LON:PVR) can now start the countdown to the start of the Barryroe oil field development, as it today confirms the signing of a binding agreement for its proposed farm-out deal with its new Chinese partners.

It promises to deliver Ireland’s first commercial offshore oil project, though the immediate focus will be on preparations for a new drilling programme slated to start next year.

READ: Providence Resources’ new seismic boosted Dunquin South potential

Specifically, the now binding deal commits the Chinese partners to carry Providence and Lansdowne Oil & Gas Ltd (LON:LOGP) for a programme of four vertical wells and one horizontal sidetrack plus the option to extend the programme with a further two horizontal wells.

Also, significantly, the deal comes with a US$19.5mln cash advance to Providence covering project and operational costs – US$9mln will be released initially, with a further US$10.5mln will be paid 14-days prior to the start of drilling.

A survey of the proposed well sites will now be advanced in the fourth quarter of this year, setting up a timeline for rig mobilisation during the second quarter of 2019.

“The finalisation of these binding farm-out terms with APEC is transformational for Providence,” said chief executive Tony O’Reilly.

He added: “This drilling programme is a significant step forward for Barryroe as it is designed to provide modern dynamic data that will assist in the field development to production. 

“Importantly, the structure of the farm-out transaction means that Providence has no upfront risk or capital exposure for the drilling programme, whilst also providing a roadmap to take this project, subject to the results of the drilling and subsequent regulatory consents, to project sanction and then on to production."

Providence, separately, today released its financial results statement for the six months ended June 30.

O’Reilly described an “exceptionally busy period” and also noted the progress made elsewhere offshore Ireland, where it also has a portfolio of exploration interests off the west coast, in the Atlantic margin.

In terms of financials, the pre-revenue explorer reported a €2.37mln loss for the six month period, compared to a €3.44mln loss for the same period a year ago.

Providence had €12.35mln of cash and no debt at the end of the period.

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Thu, 20 Sep 2018 08:23:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/205302/providence-resources-starts-countdown-for-barryroe-drilling-as-it-inks-binding-partnership-deal-205302.html
<![CDATA[News - Providence Resources says new seismic has boosted Dunquin South potential ]]> https://www.proactiveinvestors.co.uk/companies/news/201213/providence-resources-says-new-seismic-has-boosted-dunquin-south-potential-201213.html Providence Resources PLC (LON:PVR) has detailed encouraging technical insights regarding the large Dunquin South prospect, in the Porcupine Basin, offshore Ireland.

It follows the completion of the initial evaluation of new 3D seismic, shot last year, which has improved the explorer’s understanding of the area.

Firstly, the data confirms the presence of the previously mapped Dunquin South prospect which is located in the vicinity of the previously drilled Dunquin North well (which encountered evidence of a residual oil column but was not a ‘discovery’).

READ: Providence Resources buoyed by Newgrange survey

Perhaps more significant is that the new seismic has shown what Providence described as “a large and significant potential fluid escape feature” evident at Dunquin North, but, no such feature is visible at the untested Dunquin South target.

"The new 3D seismic data over FEL 3/04 are greatly enhancing our understanding of the exciting exploration potential of this block,” said Dr John O’Sullivan, Providence technical director.

“The presence of a major chimney over Dunquin North has been identified as the main reason for prospect failure. 

“It is obviously highly encouraging that no such feature has been identified over Dunquin South, which we believe substantially de-risks this exciting exploration prospect.”

O’Sullivan added: “In addition, the data are suggesting a sedimentary versus volcanic origin for the erstwhile enigmatic Dunquin Ridge, which itself may provide another very significant stacked exploration target for a future Dunquin South well."

Providence owns a 26.8% stake in Frontier Exploration Licence 3/04, which hosts Dunquin South. Its partners in the venture comprise Eni (operator), Repsol, and Sosina Exploration.

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Fri, 20 Jul 2018 07:44:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/201213/providence-resources-says-new-seismic-has-boosted-dunquin-south-potential-201213.html
<![CDATA[News - Providence Resources buoyed by Newgrange survey; new data should provide momentum to discussions with potential farm-in partners ]]> https://www.proactiveinvestors.co.uk/companies/news/200549/providence-resources-buoyed-by-newgrange-survey-new-data-should-provide-momentum-to-discussions-with-potential-farm-in-partners-200549.html  

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Wed, 11 Jul 2018 07:40:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200549/providence-resources-buoyed-by-newgrange-survey-new-data-should-provide-momentum-to-discussions-with-potential-farm-in-partners-200549.html
<![CDATA[News - Providence Resources set for early survey at Newgrange project ]]> https://www.proactiveinvestors.co.uk/companies/news/199012/providence-resources-set-for-early-survey-at-newgrange-project-199012.html Irish explorer Providence Resources PLC (LON:PVR) has announced the earlier than expected start to an offshore survey.

The Gardline M/V Kommandor survey vessel has started mobilisation ahead of data acquisition across Frontier Exploration Licence 6/14 which includes the Newgrange Prospect.

It is two months earlier than previously scheduled.

WATCH: Providence Resources offering investors a 'unique opportunity

The findings of the survey will be used in an application for a permit to drill an exploration well on Newgrange, which is located in around 1,000 metres of water (shallower than other prospects in the west coast’s Atlantic margin) and is some 260 kilometres from shore.

Providence highlighted that talks are ongoing over a potential farm-out deal to bring a partner into the project to support future drilling activity.

"We are pleased to confirm the commencement of the Newgrange site survey operations some 2 months ahead of schedule,” said Dr John O’Sullivan, Providence technical director.

“In tandem with these operations, we continue to liaise with interested potential co-venture partners whilst also constantly monitoring possible rigs of opportunity which may become available for this exciting exploration venture."

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Mon, 18 Jun 2018 08:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/199012/providence-resources-set-for-early-survey-at-newgrange-project-199012.html
<![CDATA[Media files - Providence Resources offering investors a 'unique opportunity ahead of next wave of activity' ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/9309/providence-resources-offering-investors-a-unique-opportunity-ahead-of-next-wave-of-activity--9309.html Wed, 16 May 2018 16:10:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/9309/providence-resources-offering-investors-a-unique-opportunity-ahead-of-next-wave-of-activity--9309.html <![CDATA[News - Providence Resources upbeat on Barryroe and West Coast exploration after busy 2018 ]]> https://www.proactiveinvestors.co.uk/companies/news/196703/providence-resources-upbeat-on-barryroe-and-west-coast-exploration-after-busy-2018-196703.html Providence Resources PLC (LON:PVR) chief executive Tony O’Reilly, in the Irish oil explorer’s financial results statement for 2018, told investors that it was an “extremely busy” year, albeit, the most significant recent event came after the reporting period.

“During the year, we agreed 3 major exploration farm-out transactions which provided significant momentum to our portfolio development activities and also delivered incremental capital to enhance our financial resources,” O’Reilly said.

READ: Providence Resources set for catalysts thanks to Barryroe breakthrough

This April, meanwhile, saw Providence unveil a long awaited farm-out transaction which will see the Barryroe oil field advance towards development, with a proposed three-well appraisal drill programme and testing.

In essence, the deal sets a roadmap to production from the field in Ireland’s Celtic Sea.

“Importantly, the structure of the farm-out transaction means that Providence has no upfront risk or capital exposure for the initial appraisal drilling, whilst also providing a roadmap to take this project, subject to the results of the drilling, to project sanction and on to production,” O’Reilly said.

In 2017, the operational focus for on exploration off the West Coast - though the Druid & Drombeg dual exploration well delivered disappointing results but it was not a total loss.

“Unfortunately, as we announced last summer, both targets were water wet which was very disappointing - but as a by-product, valuable regional geology, reservoir development and pressure regime data were obtained,” the Providence chief executive explained.

“As only the second wildcat exploration well ever drilled in the southern Porcupine Basin, the well data will be useful for any future planned drilling of the deeper Diablo structure contained within FEL 2/14 or other Providence assets elsewhere within the basin. 

“Importantly, from a financing perspective, the farm-out deals structured with TOTAL and Cairn substantially mitigated our cost exposure to this drilling programme.”

O’Reilly added: “We continue to be by far the most active player offshore Ireland in terms of drilling activity, commercial deals and collaborations with world-class partners.

“Looking ahead, we have the portfolio, partners, people and financial resources in place to advance our portfolio through exploration & appraisal drilling for the benefit of all our shareholders."

Financial results

In terms of financial results, the group reported a €20.4mln loss for the year, including a €14.6mln impairment to exploration and evaluation assets.

As at December 31, Providence had €19.6mln of cash and equivalents and its exploration assets carried a book value of €74.8mln.

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Thu, 10 May 2018 07:23:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196703/providence-resources-upbeat-on-barryroe-and-west-coast-exploration-after-busy-2018-196703.html
<![CDATA[News - Providence Resources set for summer seismic shoot at Newgrange ]]> https://www.proactiveinvestors.co.uk/companies/news/196528/providence-resources-set-for-summer-seismic-shoot-at-newgrange-196528.html Providence Resources PLC (LON:PVR) has updated investors on it exploration plans for the Newgrange project, off Ireland’s West Coast.

The Newgrange exploration partners have now hired Gardline to carryout a new 2D seismic data gathering programme, to examine the crest of the prospect and to provide additional data to support permitting for a future exploration well.

It is expected that Gardline’s M/V Kommandor vessel will conduct the data acquisition programme during the third quarter of this year, subject to regulatory consent.

WATCH: Providence keen to move ‘aggressively’ on Barryroe

In the meantime, Providence highlighted that it is continuing commercial talks with potential farm-in partners for the exploration project.

"We are pleased to announce the award of the 2018 Newgrange data acquisition programme to Gardline and look forward to commencing operations during the summer months,” said Dr John O’Sullivan, Providence technical director.

“The Newgrange prospect provides significant stacked exploration potential at both Jurassic and Cretaceous levels with proven source, reservoir and seal demonstrated in the previous off-structure 62/7-1 exploration well.”

O’Sullivan added: “The relatively shallow nature of the reservoir intervals also means that this data acquisition programme may provide even further insight to de-risk the potential presence of hydrocarbons within the subsurface prior to drilling."

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Tue, 08 May 2018 08:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196528/providence-resources-set-for-summer-seismic-shoot-at-newgrange-196528.html
<![CDATA[News - Providence Resources technical director to update on Dunquin South prospect ]]> https://www.proactiveinvestors.co.uk/companies/news/196212/providence-resources-technical-director-to-update-on-dunquin-south-prospect-196212.html Providence Resources PLC (LON:PVR) has told investors that technical director Dr John O’Sullivan will present a paper regarding Frontier Exploration Licence (FEL) 3/04, in the Atlantic margin, off Ireland’s west coast.

FEL 3/04 includes the undrilled Lower Cretaceous "Dunquin South" carbonate exploration prospect, and is adjacent to the area which hosted the previously drilled Dunquin North well.

Providence has a 26.84% stake in FEL 3/04 which is operated by ENI and also includes partners Repsol and Sosina. The presentation is due to be uploaded to the company’s website.

READ: Providence Resources keen to move ‘aggressively’ on Barryroe

It is one of a number of exploration areas held by Providence in Ireland’s Atlantic waters, a region that’s increasingly seen as a ‘hot spot’ for new potentially high impact exploration.

Last year, Providence took part in a drill programme albeit it didn’t unearth a discovery and it is anticipated that new wells are being planned by explorers in the region, drilling is likely to start in 2019.

In the Celtic Sea, meanwhile, the company recently secured a partnership agreement with a Chinese consortium which will see the Barryroe oil field advance to development and ultimately production.

At Barryroe, the next phase of appraisal drilling is expected to kick off in 2019.

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Wed, 02 May 2018 07:24:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196212/providence-resources-technical-director-to-update-on-dunquin-south-prospect-196212.html
<![CDATA[Media files - Providence Resources keen to move ‘aggressively’ on Barryroe ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/9130/providence-resources-keen-to-move-aggressively-on-barryroe-9130.html Mon, 23 Apr 2018 15:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/9130/providence-resources-keen-to-move-aggressively-on-barryroe-9130.html <![CDATA[News - Providence Resources and Total to advance Avalon exploration offshore Ireland ]]> https://www.proactiveinvestors.co.uk/companies/news/195241/providence-resources-and-total-to-advance-avalon-exploration-offshore-ireland-195241.html Providence Resources PLC (LON:PVR) has told investors that its Total-led joint venture will continue to advance the Avalon exploration project, in the Atlantic waters off Ireland’s west coast.

The explorer, in a statement, said that the partners have elected to apply to the Irish authorities to convert Licence Option 16/27, which hosts Avalon, into a Frontier Exploration Licence (FEL).

READ: Providence Resources set for value catalysts thanks to Barryroe breakthrough

"We are very pleased that the JV Partners, under the Operatorship of Total, have elected to convert the Avalon Licensing Option into a Frontier Exploration Licence,” said Dr John O’Sullivan, Providence technical director.

“We look forward to progressing our work on the Avalon prospect and will provide further updates as and when appropriate."

Providence owns a 40% stake in Avalon, while project operator Total has 50% and Sosina Exploration retains 10%.

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Wed, 18 Apr 2018 09:02:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/195241/providence-resources-and-total-to-advance-avalon-exploration-offshore-ireland-195241.html
<![CDATA[RNS press release - Licence Update - Licensing Option 16/27 Avalon ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180418081308_13608918/ Wed, 18 Apr 2018 08:13:08 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180418081308_13608918/ <![CDATA[News - Providence Resources set for value catalysts as Barryroe breakthrough has fired starting pistol on a busy period ]]> https://www.proactiveinvestors.co.uk/companies/news/194261/providence-resources-set-for-value-catalysts-as-barryroe-breakthrough-has-fired-starting-pistol-on-a-busy-period-194261.html Providence Resources PLC (LON:PVR) last week achieved a long awaited and hotly anticipated breakthrough for the Barryroe project, off Ireland’s south coast.

A farm-out deal with a consortium of Chines companies puts Barryroe on-track to become Ireland’s first producing oil field - at its peak the field could eventually produce a hundred thousand barrels of crude per day.

The deal is undoubtedly positive, though it essentially only represents the firing of a starting pistol that will now set in motion a busy period, both operationally and bureaucratically.

Providence shares are up around 15% in the week since the deal was announced, and plainly there’s an awful lot of scope for the price to rise - for example, broker Mirabaud’s recently upgraded target price of 33p suggests some 200% upside.

The deal will see the Chinese consortium fund a new programme of drilling and provide non-recourse financing - put simply, the upshot is that Providence now has both the technical and the economic wherewithal to bring Barryroe to production.

In all, the new partners be supporting a programme of 3 firm wells, 3 side-tracks and well testing on the Barryroe oil field.

To begin with, Providence’s subsidiary EXOLA will remain the operator, meanwhile, the Chinese partners will provide significant technical assistance and resources for the operations - including the provision of a drilling unit and related operational services.

Later, following the completion of the farm-out work programme, APEC will take the reins as operator.

The larger campaign of drilling overrides Providence’s prior single well programme, which would’ve taken place later this year and would have required financing from Providence

Although precise timelines have yet to be finalised, Providence expects drilling will get underway during 2019. Similarly, the final budgets for the drill programme have yet to be finalised though Providence notes that its prior estimates put the cost of a single well and side track was around US$25mln. In reality, this  factor is now less significant for Providence shareholders  as the consortium are funding all through their participation and or non-recourse financing.

A closer look at the partnership

The Chinese consortium is led by APEC Energy Enterprise Limited, significantly it has a strategic partnership with China Oilfield Services Co Ltd (COSL) which is in turn majority owned by Chinese state firm CNOOC Group and financial support from China Jianyin Investment Limited (JIC), which is a Chinese state-owned (100% subsidiary of China Investment Corporation) integrated investment group established.

CNOOC also owns Nexen, which is actively advancing potential high impact exploration acreage off Ireland’s west coast - indeed, CNOOC has neighbouring acreage to Providence’s own Atlantic margin projects.

It is anticipated that, via COSL, the Chinese partners will provide equipment and services for the anticipated operations at Barryroe.

The APEC consortium will have a 50% stake in Barryroe, with Providence retaining 40% and Lansdowne Oil & Gas Plc (LON:LOGP) will have 10%.

APEC will pay its pro rata share of all the costs associated with the drilling programme, and it commits to the provision of a non-recourse loan to Providence and Lansdowne to finance their Barryroe costs.

The loans will be repaid from future production, and to expedite repayment the Chinese consortium will be due a higher share (80%) of Barryroe cashflow until the debt is repaid. The loan will carry interest at LIBOR plus 5%.

Details are yet to be confirmed, but should  one assume that the total programme cost would be  $100mln, the loan element would be $50mln, which with oil at $70/barrel would equate to  less than 1 miln barrels  (out of a 300mln  field that would still be 50% owned by  Providence and Landsowne.

Subsequently, the partner’s respective share of cashflow will revert to 50%, 40% and 10% - proportionate to their ownership stakes.

APEC additionally will receive share warrants which, upon the completion of the planned Barryroe drilling, will allow them to acquire 59.2mln Providence shares at 12p each. It would raise around £7.1mln or US$10mln of new capital for the company, and the warrants would have to be exercised within six months of the completion of drilling.

What comes next?

With the Farm Out Agreement now signed, some further ancillary documentation will need to be finalised before the proposed transaction completes. Similarly, the deal would also need clearance from the Irish authorities (specifically the Minister of State at the Department of Communications, Climate Action and Environment, which is standard) and elements related to the financing would need approval from China, as it would involve state funds.

In all, it is anticipated that the transaction will close later in the third quarter of 2018. Thereafter, the Barryroe operations will naturally be a focus and it will provide many potential share price catalysts for shareholders.

Investors will, in the meantime, be keen to see further commentary around the potential project timelines, including expectations for ‘first oil’ and the potential phased development of the field (which would be the natural progression should the appraisal drilling and testing prove successful).

Providence also continues to advance plans for its offshore West Coast exploration projects, and, perhaps significantly, it was noted that the explorer will evaluate further co-venturing possibilities with its new Chinese partners.

Investors will, upon completion of the farm-out, look for clarification of just how much existing capital will retained for its other exploration plans (before agreeing the deal the company had sufficient funds for its own to cover a small programme at Barryroe).

The company has an extensive catalogue of exploration prospects in Ireland’s Atlantic Margin.

It was the first in the basin, and it has since been joined in the region by several larger oil firms – including the likes of CNOOC via Nexen, Exxon, Statoil, and Total.

Advancing West Coast assets too

Just this week, Providence updated investors on its plans to drill a well on the Newgrange prospect which could be a lower cost (and therefore lower risk) test of a potentially large accumulation.

Newgrange is a shallower target compared with other Atlantic prospects, at a depth of around 500 metres, and as a result it can be drilled more quickly and a well could be drilled for a comparatively low cost.

Potentially, a well at Newgrange could be added to planned third-party drill campaigns on nearby licences, which would take place next year, and in that regard Providence, in this week’s stock market statement, said commercial negotiations were being advanced.

“As the Newgrange well duration is expected to be extremely short, given that the primary Cretaceous reservoir target is just c. 500 metres below the seabed, we are talking to other Operators regarding potential rig-share opportunities,” Providence technical director Dr John Sullivan said.

“In addition, the Newgrange partners are in dialogue with a number of third parties regarding a potential farm-out of equity in this low cost high potential exploration project."

Newgrange is just one of several projects that will likely come forward out of the portfolio now that the Barryroe project is moving forward. Events of the past months clearly give confidence that Providence is certainly now a company that does deals – the Barryroe transaction marks the fourth farm-out in the last year

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Wed, 04 Apr 2018 15:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/194261/providence-resources-set-for-value-catalysts-as-barryroe-breakthrough-has-fired-starting-pistol-on-a-busy-period-194261.html
<![CDATA[News - Providence Resources advances preparations for future drilling at Newgrange prospect ]]> https://www.proactiveinvestors.co.uk/companies/news/194117/providence-resources-advances-preparations-for-future-drilling-at-newgrange-prospect-194117.html Providence Resources PLC (LON:PVR) told investors it has secured an extension to the frontier exploration licence hosting the Newgrange prospect, off Ireland’s west coast.

The Irish authorities have now extended the first phase of the licence out to March 2019 to allow more time for the acquisition of new 3D seismic data over the crest of the Newgrange target. It is anticipated that this desktop work will the company to advance the planning of an exploration well.

"We are very pleased to be granted this extension to the Newgrange licence, which will allow for the acquisition of a new high resolution 2D seismic survey together with seabed data which may allow us to further de-risk the Newgrange prospect,” said Dr John O’Sullivan, Providence technical director.

“These data will also facilitate commencement of the detailed planning process for the Newgrange exploration well.”

Farming out

Providence last week struck a long anticipated partnership deal, bringing a Chinese company into the Barryroe project and securing funding to advance the project towards production.

Providence added today that it continues to progress commercial negotiations for Newgrange and it is also talking with neighbouring operators given the potential synergies for an expedited drill programme that could be tacked onto anticipated nearby drill programmes.

Newgrange is a shallower target compared with other Atlantic prospects, at a depth of around 500 metres, and as a result it can be drilled more quickly and a well could be drilled for a comparatively low cost.

O’Sullivan added: “As the Newgrange well duration is expected to be extremely short, given that the primary Cretaceous reservoir target is just c. 500 metres below the seabed, we are talking to other Operators regarding potential rig-share opportunities.

“In addition, the Newgrange partners are in dialogue with a number of third parties regarding a potential farm-out of equity in this low cost high potential exploration project."

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Tue, 03 Apr 2018 07:29:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/194117/providence-resources-advances-preparations-for-future-drilling-at-newgrange-prospect-194117.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180328090545_13584686/ Wed, 28 Mar 2018 09:05:45 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180328090545_13584686/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180328090023_13584679/ Wed, 28 Mar 2018 09:00:23 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180328090023_13584679/ <![CDATA[News - Providence Resources brings in Chinese group to develop Barryroe ]]> https://www.proactiveinvestors.co.uk/companies/news/193941/providence-resources-brings-in-chinese-group-to-develop-barryroe-193941.html Irish oil explorer Providence Resources PLC (LON:PVR) has finally found a partner for its Barryroe project in the Celtic Sea.

A Chinese consortium led by Apec Energy has agreed to take a 50% interest in the project in return for the cost of three wells and associated side-tracks.

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

Apec will pay half of the well costs itself, with the remaining 50% financed by a non-recourse loan set against future cashflow from the prospect.

Providence holds 80% of Barryroe (which will drop to 40%) and is the operator of the project. Lansdowne Oil & Gas PLC (LON:LOGP) currently owns the other 20% (10% after).

The Irish oil group has been looking for a partner at Barryroe for at least five years.

Tony O’Reilly, chief executive, said the deal was a significant transaction that would allow exploration of the different parts of the Barryroe field and give it the tools to bring the field into production.

Providence, through its Exola subsidiary, will remain in charge of the drilling programme, though beyond the three well deal, Apec has the option to take over the development.

Apec is a privately-owned Chinese group that is working in partnership with COSL, a subsidiary of China state oil giant CNOOC, and state-owned investment group JIC.

As part of the deal, Apec will be issued warrants that if exercised (at 12p) would give it a 9.9% stake in Providence.

Barryroe question answered?

Providence shares were trading as high as 625p when the excitement over Barryroe was at its height in 2013.

The subsequent decline underlines how difficult it has been for the Irish company to move the project forward.

A weak oil price will have had some impact, but the Chinese commitment can see the field turn into a significant cash generator.

Six wells have been drilled at the prospect thus far – four by Esso/Exxon in the 1970’s, one by Marathon in 1990 and Providence/Lansdowne’s well in 2011/12.

Estimated resources are 311mln barrels of oil (ignoring gas) on a 50/50 chance or 2C basis.

Should the project now advance to production, as Providence now anticipates, then it will give it a strong cash generative base.

Based on past projections, the field is itself a very significant and potentially world-class asset with production estimated at an initial 30,000 barrels per day.

Formal closure of the farm-out is expected in the third quarter this year, after which the drill targets will be selected.

Steve Boldy, Lansdowne’s chief executive, added: "The Chinese Consortium brings a wealth of technical and operational expertise.

“Upon closing, Lansdowne will retain a net 34.5MMboe of contingent resources (2C) for its 10% ownership of Barryroe, with significant additional upside in terms of further exploration potential.

“The third party funded drilling program will look to convert a sizeable amount of these resources into proven and probable (2P) reserves ahead of subsequent development and production.

"With a current market cap of just $10M, Lansdowne’s valuation equates to less than $0.3 per contingent barrel for its 10% ownership.”

Lansdowne shares rose 38% to 1.82p and Providence 18% to 11.1p.

 

- adds detail and share prices --

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Wed, 28 Mar 2018 08:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/193941/providence-resources-brings-in-chinese-group-to-develop-barryroe-193941.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180308140600_13560220/ Thu, 08 Mar 2018 14:06:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180308140600_13560220/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180308140032_13560213/ Thu, 08 Mar 2018 14:00:32 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180308140032_13560213/ <![CDATA[News - Providence Resources and Lansdowne Oil & Gas shares soar as Barryroe excitement resurfaces ]]> https://www.proactiveinvestors.co.uk/companies/news/189392/providence-resources-and-lansdowne-oil-gas-shares-soar-as-barryroe-excitement-resurfaces-189392.html 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.

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Tue, 02 Jan 2018 10:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/189392/providence-resources-and-lansdowne-oil-gas-shares-soar-as-barryroe-excitement-resurfaces-189392.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180102090541_13481808/ Tue, 02 Jan 2018 09:05:41 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180102090541_13481808/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180102090042_13481806/ Tue, 02 Jan 2018 09:00:42 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20180102090042_13481806/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171228140548_13479368/ Thu, 28 Dec 2017 14:05:48 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171228140548_13479368/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171228140043_13479362/ Thu, 28 Dec 2017 14:00:43 +0000 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171228140043_13479362/ <![CDATA[News - Providence Resources and Lansdowne Oil & Gas closer to Barryroe farm-out with signing of exclusivity deal ]]> https://www.proactiveinvestors.co.uk/companies/news/189307/providence-resources-and-lansdowne-oil-gas-closer-to-barryroe-farm-out-with-signing-of-exclusivity-deal-189307.html Providence Resources PLC (LON:PVR) and Lansdowne Oil & Gas Plc (LON:LOGP) are now closer to sealing a farm-out deal for the Barryroe field, in the Celtic Sea offshore Ireland, with the signing of an exclusivity agreement with a potential partner.

Lansdowne shares jumped 40% in Thursday’s early transactions, while Providence shares gained 7.87%.

READ: Providence Resources gets consent to transfer Celtic Sea interests

The two AIM-quoted explorers intend to drill again at Barryroe in 2018, and landing a long-awaited new partnership would be a significant boon to those plans.

“The company has continued to engage with interested co-venture partners and earlier this month, having reached provisional agreement on key commercial terms with a potential farminee, we have granted a period of exclusivity to them in order to conclude contractual negotiations which, if successful, would deliver a multi-well programme at Barryroe,” said Tony O’Reilly, Providence chief executive.

“However, given its conditional nature and subjectivity to final contracts, no specific commercial details are being released at this time. 

“Shareholders should note that there is no certainty that this farm-in will be concluded and further announcements will be issued in due course and as appropriate.”

READ: Providence Resources details new Barryroe drill programme

At the same time, Providence also confirmed that French oil major, Total, has now exercised its option to remain partnered in its Atlantic exploration venture, sealing its acquisition of a 35% stake in Frontier Exploration Licence 2/14 – which contains/contained the Druid, Drombeg, and Diablo assets.

Cairn Energy PLC (LON:CNE), meanwhile, has allowed its option to buy-into the Licence Option 16/27, the Avalon project, lapse. Total retains its 50% stake and operatorship of the Avalon venture.

Summing up the remaining portfolio adjustments, O’Reilly added: “Elsewhere in the portfolio, the impetus being shown by the ENI-led FEL 3/04 (Dunquin) partnership was best demonstrated by the JV's accelerated decision to license a new 3D seismic data-set over the area. 

READ: Cairn Energy in the middle of a “massive year” - broker

“It is hoped that these new data will help differentiate between the ‘breached’ Dunquin North structure and the potentially sealed Dunquin South exploration prospect. 

“Finally, as announced at the Atlantic Ireland conference in Dublin in October, we have committed to a pre-drill site survey in 2018 over our Newgrange prospect in FEL 6/14, where we hold an operated 80% interest and which is also the subject of significant commercial interest.”

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Thu, 28 Dec 2017 08:18:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/189307/providence-resources-and-lansdowne-oil-gas-closer-to-barryroe-farm-out-with-signing-of-exclusivity-deal-189307.html
<![CDATA[News - Providence Resources gets consent to transfer Celtic Sea interests ]]> https://www.proactiveinvestors.co.uk/companies/news/186637/providence-resources-gets-consent-to-transfer-celtic-sea-interests-186637.html Providence Resources PLC (LON:PVR) has received the go-ahead to conclude previously agreed partnership deals offshore Ireland.

The Minister of State at the Department of Communications, Climate Action and Environment has given consent for Providence to transfer stakes in certain projects.

READ: Providence Resources details new Barryroe drill programme

It is now able to assign a 10% interest in the Helvick project in the Celtic Sea to Lansdowne Oil & Gas Ltd (LON:LOGP).

The company will also assign 10% of Helvick to Nu-Oil and Gas Plc (LON:NUOG) subsidiary, Marginal Field Development Company Limited, and it will assign 10% in the Dunmore project, also in the Celtic Sea.

READ: Providence Resources confirms Total farm-in to Avalon project

Additionally, the company has been given consent to acquire interests in the Dunquin South project from Atlantic Petroleum, as agreed in July 2015, where it is partnered with Eni and Repsol.

Providence now formally owns 26.846% of Dunquin South.

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Thu, 02 Nov 2017 08:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/186637/providence-resources-gets-consent-to-transfer-celtic-sea-interests-186637.html
<![CDATA[News - Providence Resources details new Barryroe drill programme ]]> https://www.proactiveinvestors.co.uk/companies/news/186465/providence-resources-details-new-barryroe-drill-programme-186465.html Providence Resources PLC (LON:PVR) has given investors more details of its new drill plans for the Barryroe project.

The company said in a statement that it plans to drill a new well and a side-track in either the second half of next year or the first half of 2019.

READ: Providence Resources confirms Total farm-in to Avalon project

Barryroe 48/24-K, the new well, will be positioned some 5 kilometres away from the last Barry well, on the east flank of the field.

Phase 1 drilling is targeting some 436mln barrels of oil in place, and it is expected to cost a total of US$25mln, with Providence’s share at around US$20mln.

Providence highlighted that the two planned well penetrations are designed to provide further "definition around structure, reservoir, fluid phase, connectivity and resource estimates" - thereby materially moving the east flank of the Barryroe field towards development.

READ: Providence Resources receives US$5.4mln from Total

Additionally, the company highlighted that it is planning a site survey for the Newgrange exploration area, which is located between the southern Porcupine and Goban Spur Basins, with the operations anticipated in the summer.

The aim is to advance Newgrange for potential exploration drilling, anticipated between 2019 and 2020.

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Tue, 31 Oct 2017 07:27:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/186465/providence-resources-details-new-barryroe-drill-programme-186465.html
<![CDATA[News - Providence Resources confirms Total farm-in to Avalon project ]]> https://www.proactiveinvestors.co.uk/companies/news/185773/providence-resources-confirms-total-farm-in-to-avalon-project-185773.html Providence Resources PLC (LON:PVR) told investors that Total has now taken up its option to farm-in to the Avalon exploration project, offshore Ireland.

In a statement, the company said that Total now has 50% of the Licensing Option (LO) 16/27 following approval by Ireland’s Minister of State at the Department of Communications, Climate Action and Environment.

READ: Providence Resources receives US$5.4mln from Total

Under the terms of the deal, Total pays Providence US$175,000 for pro-rata past costs, as well as covering further costs up to US$1.33mln.

Should the partners take the licence option further, converting into a frontier exploration licence, then Total will cover 60% of the drilling costs up to a maximum of US$42mln.

Total will be the operator, with 50%, while Providence retains 40% meanwhile Sosina has 10%.

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Wed, 18 Oct 2017 07:36:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/185773/providence-resources-confirms-total-farm-in-to-avalon-project-185773.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171009164044_13390879/ Mon, 09 Oct 2017 16:40:44 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171009164044_13390879/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171009163537_13390874/ Mon, 09 Oct 2017 16:35:37 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20171009163537_13390874/ <![CDATA[News - Providence Resources receives US$5.4mln from Total ]]> https://www.proactiveinvestors.co.uk/companies/news/184804/providence-resources-receives-us54mln-from-total-184804.html Providence Resources PLC (LON:PVR) has confirmed that the company has now received a US$5.4mln payment from Total.

It is the second and final payment from Total under the option agreement for the Frontier Exploration Licence 2/14 exploration area, offshore Ireland, the company said in a statement.

READ: Providence Resources confirms completion of west Ireland programme

Earlier this week, on Tuesday, it was confirmed that the Stena IceMAX deep-water drillship used to drill the recent exploration well off Ireland’s west coast has now completed all requisite plug and abandonment operations. It is now off hire and has departed the well site, in transit back to Las Palmas, Gran Canaria.

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Fri, 29 Sep 2017 07:26:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/184804/providence-resources-receives-us54mln-from-total-184804.html
<![CDATA[News - Providence Resources confirms completion of west Ireland programme ]]> https://www.proactiveinvestors.co.uk/companies/news/184570/providence-resources-confirms-completion-of-west-ireland-programme-184570.html Irish oil firm Providence Resources PLC (LON:PVR) has confirmed the completion of its offshore work programme in the Atlantic Margin.

The Stena IceMAX deep-water drillship used to drill the recent exploration well off Ireland’s west coast has now completed all requisite plug and abandonment operations.

READ: Providence Resources confirms it will drill again at Barryroe, without a farm-out

It is now off hire and has departed the well site, in transit back to Las Palmas, Gran Canaria.

Providence still awaits news from Total, which has an option to retain a stake in the remaining exploration acreage in Frontier Exploration Licence 2/14, located in the southern Porcupine basin.

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Tue, 26 Sep 2017 07:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/184570/providence-resources-confirms-completion-of-west-ireland-programme-184570.html
<![CDATA[News - Providence Resources confirms it will drill again at Barryroe, without a farm-out ]]> https://www.proactiveinvestors.co.uk/companies/news/184353/providence-resources-confirms-it-will-drill-again-at-barryroe-without-a-farm-out-184353.html Providence Resources PLC (LON:PVR) chief executive Tony O’Reilly has confirmed that the Irish oil firm intends to drill a new well on the Barryroe field without a new partner.

The company, which owns 80% of the undeveloped Celtic Sea oil field, had been frustrated in its efforts to secure a new partnership for Barryroe, but, in the wake of a recent exploration disappointment off Ireland’s west coast, the project has provided something of a silver lining for investors.

Providence raised new capital for the Atlantic adventure, and it also landed investment from blue-chip oil partners too. As a result, the exploreris left with sufficient funds to take new steps at Barryroe.

O’Reilly, in Providence’s half yearly results statement, told investors: “At Barryroe, we have continued farm-in discussions - but to date, no deal has been consummated. Whilst discussions continue, the board has taken a decision to advance drilling at Barryroe. 

“Noting the significant value attributable to Barryroe and prevailing low rates for rigs and associated offshore services, we have moved forward with planning for drilling (and possibly a side-track).

“Last month, we issued a request for expressions of interest for the supply of a mobile offshore drilling unit and have started the consent process for drilling. 

“The details on the forward dates for the planned drilling programme will be communicated once the schedule is finalised.”

A breakout success at Barryroe back in 2012 sent Providence shares soaring, only to fall back as farm-out negotiations stalled amid increasingly challenging oil markets as the falling price of crude took growth project off the table for ‘Big Oil’.

Providence sees Barryroe as a 100,000 barrel per day operation at its anticipated peak but it is understood that further appraisal work is required for the development.

While Providence is prepared to drill without a new exploration partner, the support of a development partner would still be needed to take the major project into production.

Atlantic disappointment

Providence shares have tumbled some 60% in recent weeks following the disappointing results from the Druid-Drombeg exploration well – which targeted two prospects that could’ve held some 5bn barrels of crude but were found to be water bearing.

The explorer had executed commercial deals with Cairn Energy and Total for the Atlantic Margin project.

Presently, Providence is awaiting a decision from Total which has an option to participate in the exploration area moving forward, with other un-tested targets such as Diablo still on the board for Providence.

READ: Providence Resources to focus on new Barryroe drilling after Drombeg disappointment

Similarly, Cairn has an option to participate in the exploration of the Avalon prospect and Providence is also waiting for the partner to make a decision.

“The drilling of the 53/6-1 Druid/Drombeg exploration well was a major operational undertaking for Providence, being situated in the deepest water depth ever drilled offshore north-west Europe,” O’Reilly said.

“The results from the 53/6-1 well were disappointing as, while both reservoir sections were encountered within the pre-drill depth prognosis, both were water bearing.

“The possible presence of bitumen was reported in drill cuttings within the Drombeg reservoir interval, which may indicate that it received an oil charge which was not retained at this location. However, further studies will be required in order to confirm this interpretation and its implications for the wider prospectivity within FEL 2/14.”

The Providence boss added: “Providence remains the most active explorer offshore Ireland, with over 20 years' operational experience generally and specifically some 13 years since it first licensed acreage in the Porcupine Basin. 

“Looking ahead, we will continue to seek to capitalise on the significant and unrealised value of our portfolio for the benefit of our shareholders."

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Thu, 21 Sep 2017 07:42:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/184353/providence-resources-confirms-it-will-drill-again-at-barryroe-without-a-farm-out-184353.html
<![CDATA[News - Providence Resources shareholder increases stake amid price volatility ]]> https://www.proactiveinvestors.co.uk/companies/news/183817/providence-resources-shareholder-increases-stake-amid-price-volatility-183817.html A stock market statement on Tuesday Morning revealed that Providence Resources PLC (LON:PVR) shareholder Pageant Holdings increased its stake in the explorer amid yesterday’s share price volatility.

Providence dropped as much as 40% at one point on Monday after it confirmed negative well results, revealing that the Drombeg exploration prospect contained water rather than oil.

READ: Providence Resources to focus on new Barryroe drilling after Drombeg disappointment

Pageant’s stake in Providence increased on September 11 to 57.95mln shares, or 9.7%, up from a prior declaration of a 49.3mln share or 8.25% stake back in August.

The apparent signal of support wasn’t sufficient to move the Providence price into positive territory, with the share down just over 2% on Tuesday to trade at 5.52p. 

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Tue, 12 Sep 2017 09:48:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/183817/providence-resources-shareholder-increases-stake-amid-price-volatility-183817.html
<![CDATA[News - Providence Resources to focus on new Barryroe drilling after Drombeg disappointment ]]> https://www.proactiveinvestors.co.uk/companies/news/183749/providence-resources-to-focus-on-new-barryroe-drilling-after-drombeg-disappointment-183749.html Providence Resources PLC (LON:PVR) shares took another big hit on Monday, after the Irish explorer revealed that the second and final target in its exploration programme was found to be water bearing.

The Irish explorer was down 2p, 25.8%, changing hands at 5.75p and at one point had traded down to 4.81p, which was a new 52-week low.

It follows a similarly disappointing result for the well’s Druid exploration target.

The Irish exploration well will now be being plugged and abandoned.

"The 53/6-1 well results at the Drombeg level are disappointing and we will now assess these well data in order to understand what implications they have for prospectivity within the licence including in the underlying pre-Cretaceous Diablo Prospect together with other anomalies within FEL 2/14,” said Tony O’Reilly, Providence chief executive.

O’Reilly said that frontier exploration requires perseverance and he highlighted that more drilling will take place nearby – in the neighbouring licence – where the Chinese state explorer is targeting a play that’s similar to Providence’s untested Diablo prospect.

The negative impact of the exploration disappointment is somewhat mitigated by the fact that it was funded by some US$45mln of outside capital, provided by separate partnership deals with Cairn Energy and Total.

Attentions now turn to Barryroe

Providence still retains a significant amount of capital, thanks to the Cairn and Total deals, and, as a result the company may be able to move on from the exploration disappointment relatively quickly by returning to Barry, its would-be flagship project.

The company has spent several years trying to bring a partner into the Barryroe project, in the Celtic Sea off Ireland’s south coast, where it has a proven oil field and plans to build a large and significant production operation.

It is a big project that would eventually target some 100,00 barrels of oil production per day, and as such it is expected to have significant start-up capital costs.

Now, after the Druid-Drombeg disappointment, Providence appears to be taking more involved approach with plans to drill a new well.

Partnership deals are said to have been close to fruition in the past, and, in July, the company repeated that it was in “dialogue with a number of parties regarding advancing the appraisal of Barryroe through to first oil”.

It had previously been flagged that Barryroe may require further appraisal, and, thanks to the commercial deals before the west coast programme the company now has enough funds to get back to work at Barryroe.

Undeniably, a partnership deal will still be necessary to advance the large project into the development phase, nonetheless, positive appraisal well results would likely expedite negotiations and ultimately move the company closer to production.

Strategically, a successful programme may also buy the Providence management team sufficient time and good will to allow the broader Atlantic Margin exploration story to advance as the recent influx of international oilers take their new earlier stage projects forward.

Providence has been making preparations for the new Barryroe programme in recent weeks.

Investors will now await Providence’s financial results statement, due September 21, for further guidance on its Barryrow plans.

There may still be reason to look again at Drombeg

Whilst this programme has not delivered, for either Druid or Drombeg, analysis of the latter did provide a glimmer of positivity for future exploration.

The company highlighted that the presence of bitumen in drill cuttings was reported within the Drombeg reservoir interval and, according to Providence, this suggests the potential that there was an early oil charge in the reservoir but it was not retained in this particular location.

Drombeg is seen as a fan system, and it was noted by Providence that the positioning of the exploration well had prioritised the earlier target (Druid), with the decision to extend out to test Drombeg coming only after the budget increased as the Cairn Energy tie-up was agreed.

Indeed, the well had been described as ‘not optimally geologically located’ for Drombeg and it was said to be at the margin of the system.

Time and further analysis will tell whether or not there is any material follow up is warranted at Drombeg, or whether the exploration area is a write-off altogether.

Investors will, however, get a clue in the coming weeks as Total will now have 60 days to take up its option for a 35% stake in the frontier exploration licence.  Similarly, Cairn has 60 days to decide whether to take up an option for a 20% stake in the separate Avalon prospect.

In the meantime, it looks like it will continue to be a volatile time for Providence shares.

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Mon, 11 Sep 2017 11:26:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/183749/providence-resources-to-focus-on-new-barryroe-drilling-after-drombeg-disappointment-183749.html
<![CDATA[News - Providence Resources Irish exploration well disappoints ]]> https://www.proactiveinvestors.co.uk/companies/news/183724/providence-resources-irish-exploration-well-disappoints-183724.html Providence Resources PLC (LON:PVR) has revealed the disappointing news that Drombeg, the second and final target in its exploration programme, has been found to be a water bearing reservoir.

It follows a similarly disappointing result for the well’s Druid exploration prospect. The Irish exploration well will now be being plugged and abandoned.

"The 53/6-1 well results at the Drombeg level are disappointing and we will now assess these well data in order to understand what implications they have for prospectivity within the licence including in the underlying pre-Cretaceous Diablo Prospect together with other anomalies within FEL 2/14,” said Tony O’Reilly, Providence chief executive.

READ: Providence Resources looks to Drombeg target after Druid disappoints

“Frontier exploration requires perseverance and we look forward to seeing the outcome of exploration wells planned for acreage proximate to FEL 2/14, which will test plays similar to Diablo and to those which have proved to be successful in the conjugate Flemish Pass Basin, offshore Canada."

O’Reilly highlighted that the exploration well is in the deepest water of any exploration well ever drilled offshore Ireland and is an important operational milestone for Providence.

READ: Providence Resources outlines Avalon, another high potential exploration prospect offshore Ireland

He added: “Furthermore, through our pre-drill commercial transactions with Cairn (farm-in) and TOTAL (Option), Providence's financial exposure to the well was significantly reduced, thereby ensuring that we remain well funded for our forward drilling operations offshore Ireland, with Barryroe being planned as our next well in this programme."

Providence had a 56% stake in the well, alongside partner Cairn which owned 30%.

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Mon, 11 Sep 2017 07:21:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/183724/providence-resources-irish-exploration-well-disappoints-183724.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170908140535_13357044/ Fri, 08 Sep 2017 14:05:35 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170908140535_13357044/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170908140025_13357034/ Fri, 08 Sep 2017 14:00:25 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170908140025_13357034/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170907164039_13355796/ Thu, 07 Sep 2017 16:40:39 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170907164039_13355796/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170907163534_13355790/ Thu, 07 Sep 2017 16:35:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/824/LSE20170907163534_13355790/ <![CDATA[News - Providence Resources looks to Drombeg target after Druid disappoints ]]> https://www.proactiveinvestors.co.uk/companies/news/181967/providence-resources-looks-to-drombeg-target-after-druid-disappoints-181967.html Providence Resources PLC (LON:PVR) shares dropped as much as 40% early deals on Friday after it told investors that its drilling operation offshore Ireland encountered the Druid target on-prognosis, but, the reservoir was found to be water bearing.

The first of the well’s two targets has disappointed. Druid accounted for slightly more than 3bn barrels of the well’s 5bn barrel resource potential.

Drilling will now continue down to the Drombeg target, which is anticipated some 1,000 metres beneath Druid.

Drombeg has been estimated to have the potential for 1.9bn barrels of oil.

The exploration well is located around 220 kilometres off Ireland’s west coast, in a water depth of 2,233 metres.

At around 8:30am, Providence shares were down just over 6p, 39%, trading at 9.62p.

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Fri, 04 Aug 2017 07:18:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/181967/providence-resources-looks-to-drombeg-target-after-druid-disappoints-181967.html
<![CDATA[News - Providence Resources outlines Avalon, another high potential exploration prospect offshore Ireland ]]> https://www.proactiveinvestors.co.uk/companies/news/180956/providence-resources-outlines-avalon-another-high-potential-exploration-prospect-offshore-ireland-180956.html Providence Resources PLC (LON:PVR) has outlined the big potential at the Avalon exploration project offshore Ireland, near the ongoing Druid-Drombeg exploration well offshore Ireland.

The company, which is partnered by Total and Sosina in the project, told investors that it has submitted a technical report regarding Avalon to Ireland’s Department of Communications, Climate Action and Environment.

It includes a large scale Petroleum Systems Model (PSM) covering Avalon and other areas of Licence Option 16/27.

READ: Providence Resources’ Druid-Drombeg exploration well has major promise

The model demonstrates that the Avalon prospect could potentially access a total hydrocarbon resource charge of 8.67bn barrels of oil and 21.43trn cubic feet of gas equivalent to c. 12 BBOE), Providence explained.

That being said, the company pointed out that it was an early assessment of the potential. “Whilst petroleum systems modelling in emerging frontier basins have inherently high degrees of uncertainty, the results of this study are directionally very positive for the potential charging of the Avalon prospect,” it added.

Providence has a 40% interest in Avalon, whereas Total can take 50% and Sosina has 10%.

Significant hydrocarbon potential

Dr John Sullivan, Providence technical director, in a statement, said: “The work completed during the first year of Licensing Option 16/27 has confirmed our view as to the significant hydrocarbon resource potential of the Paleocene "Avalon" prospect. 

“Whilst the nearby 53/6-A well programme is currently assessing the similar-aged Paleocene "Druid" stratigraphic prospect, as well as the deeper Lower Cretaceous "Drombeg" prospect, Avalon is somewhat differentiated insofar as it demonstrates a potentially different trapping mechanism with structural closure mapped in the proximal sediment transport direction. 

“The proximity of Avalon to the deeper breached "Dunquin North" oil accumulation is also a potential positive in terms of hydrocarbon sourcing.”

Sullivan added: “We look forward to working with our JV Partners to mature the Avalon prospect to drillable status."

Druid-Drombeg drilling

Providence last week kicked off the Druid-Drombeg exploration well, off Ireland’s west coast. It is a duel target which is targeting a total of some 5bn barrels of oil potential.  Here, the company is partnered with Cairn Energy, Sosina and Total has an option to acquire a 35% stake.

The Stena IceMAX deep-water drillship is contracted for the programme, and operations began after the Minister of Communications, Climate Action and Environment gave consent on July 11.

Providence told investors that a further update will be provided once the Druid prospect has been penetrated, or as appropriate, drilling is then planned to continue down to the underlying Drombeg prospect.

The programme is expected to run for 30-45 days.

The Irish oil firm has a 56% stake in the well, alongside its partner Cairn Energy which owns 30% and Sosina Exploration which has 14%. French major Total has an option to acquire a 35% stake in the project.

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Mon, 17 Jul 2017 07:39:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/180956/providence-resources-outlines-avalon-another-high-potential-exploration-prospect-offshore-ireland-180956.html
<![CDATA[News - Providence Resources’ Druid-Drombeg exploration well has major promise ]]> https://www.proactiveinvestors.co.uk/companies/news/180909/providence-resources-druid-drombeg-exploration-well-has-major-promise-180909.html Big news elsewhere somewhat overshadowed what was in its own right the very significant announcement that drilling had begun on the Druid-Drombeg exploration well, off Ireland’s west coast.

Premier unveiled its new 1bn barrel discovery offshore Mexico, its 25% owned Zama project, on the very same morning as the Providence Resources PLC (LON:PVR) led Irish exploration well got underway.

By the afternoon, as news broke of Shell’s US$1.23bn exit from the Corrib gas field, Providence wasn’t even the day’s biggest oil and story in Ireland, let alone the broader market.

Nonetheless, the Druid-Drombeg has the potential to be five times bigger than Premier’s Zama find and successes in the deep waters of the Atlantic Margin may well in time displace Corrib as Ireland’s most significant offshore project.

The well is a major catalyst for Providence Resources, and plainly the project has spoken to the AIM-firm’s larger partners Cairn Energy and Total.

It is a very big opportunity

First and foremost Druid-Drombeg represents a very big opportunity, more than 5bn barrels across two targets.

Secondly, unlike at still-undeveloped Barryroe, Providence has already convinced larger companies to join it at an early stage. Not only does that mean the exploration costs are shared, it also means that, in the event of a success, the transition into development is less likely to stall.

Perhaps, most significant is the fact that the Providence well is likely the first in a number of wells in region.

Several major oil firms took up new exploration ground in the area, off Ireland’s west coast, a new 3D seismic exploration programme has this month begun and it has been rumoured that the a broader phase of exploration drilling could begin as soon as next year.

A somewhat less obvious thing to consider is that this new exploration programme has provided a window of goodwill in the market, one in which the company may perhaps break the Barryroe deadlock at long last.

With all the excitement of new exploration, it is fairly easy to forget that Providence already has a major oil project on its books, albeit one that was kicked deep into the long grass as the chances of a farm-out deal fizzled out around the time that crude prices retreated back in 2014.

Potential partners backed away during the sector-wide readjustments and new capex became taboo in ‘Big Oil’ boardrooms, but, the Irish oil firm also had its own financial matters to straighten out.

Last year's funding rekindled Providence

The dilutive funding deal, when it inevitably came, was no doubt painful for shareholders that had been in Providence long enough to remember the Barryroe post-appraisal highs, back when PVR changed hands for nearly 700p on AIM.

As painful as it may have been for existing shareholders at the time, the US$76.6mln funding just over a year ago was the pivotal reboot moment that has effectively set up this new exploration opportunity.

It told the market and potential new partners that Providence had weathered the oil price storm, it was still standing and it had enough backers to actively move its Irish oil business forward.

Pragmatically, the funds meant Providence could advance its West Coast exploration plans at a time, coincidently, when there was suddenly a lot more industry interest in Ireland’s Atlantic Margin.

Whilst it was able to pay for drilling by itself, the subsequent introduction of Cairn and the potential introduction of Total (via its exclusive option deal) meant that the scope of the well could be expanded.

Drilling kicked off in the second week of July, and the programme ought to last some 45-60 days.

Excitement ahead of the Druid-Drombeg has been the driver of Providence’s resurgent share price surge, the stock is up around 20% in recent weeks.

Such is the nature of oil exploration punts, it is more than likely that Providence is setting up into a somewhat binary phase now that drilling is underway. A success could see a transformational impact on the share price whereas the disappointment of a ‘dry’ well would be harshly penalised in the market.

For punters, it is high risk and high reward proposition.

Barryroe remains an elephant in the room

That being said, Barryroe remains the elephant in the room. The perennial possibility of a Barryroe deal presents something of a caveat to the binary - an unexpected third option in an otherwise binary story.

Now, admittedly, the idea that a Barryroe transaction could be suddenly come to fruition has been a long hoped for panacea for long term Providence shareholders, many of whom have had their hopes raised and then dashed more than once by this stage.

This week’s second RNS from the Irish oil firm, on Thursday, was tacit reminder that the Barryroe issue is never far from the Providence story.

Providence and partner Lansdowne, which own 80% and 20% respectively, were granted a licence extension for Barryroe, in the Celtic Sea, where the company wants to develop an oilfield able to produce up to 100,000 bopd.

Extending the licence period will, presumably, be a positive for talks that are said to be ongoing.

The first phase of the licence has been extended to July 2019, meanwhile, the overall term of the licence now lasts until July 2021. The extension is subject to the partners completing a work programme, including analysis of new 3D seismic data, and that they provide an assessment of the Jurassic and Triassic potential in the area.

O’Reilly, in a statement, said: "We are very pleased to be granted these extensions to the Barryroe licence, which provides additional security of tenure whilst we continue the farm-out process.

“The Barryroe partners are in dialogue with a number of parties regarding advancing the appraisal of Barryroe through to first oil. The extension work programme includes evaluating the deeper exploration potential of the licence, which offers exciting upside, over and above the substantial resources already identified in Barryroe."

There can be no doubt that the excitement and positivity surrounding Providence at the moment is all about west coast exploration, but, for those that have followed the company over the longer term Barryroe is a question that needs an answer.

Given the present goodwill in the market, if a Barryroe deal is a real possibility, what better time is there to strike it than now?

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Fri, 14 Jul 2017 12:39:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/180909/providence-resources-druid-drombeg-exploration-well-has-major-promise-180909.html