Providence to sell stakes in assets

PROVIDENCE Resources is likely to sell further equity stakes in its Irish-based assets, as it progresses with its two-year €350 million drilling programme off the country’s coastline.

Shareholders attending the exploration company’s annual general meeting in Dublin yesterday heard that interest has been expressed in the Rathlin Island oil licence, which Providence owns outright and is due to drill on next year. The company’s chief executive, Tony O’Reilly Jnr, said that stakes in other assets — Providence is due to drill across six basins off the Irish and British coasts across the remainder of this year and 2012 — could be sold to develop further strategic partnerships.

This could even include the company’s Barryroe discovery off the Cork coast in the Celtic Sea. Drilling on that asset — which is 50% owned by Providence, with the remainder owned by San Leon Energy and Lansdowne Oil & Gas — is due to kick-off the drilling campaign in September.

Talking about the drilling round, Mr O’Reilly said that the Dunquin prospect off the south-west coast is a “world class” structure, the Dragon field off the coast of Wexford could be bigger than initially thought, and the Dalkey Island prospect off the Dublin coast, is potentially “a very, very big prize”.

He also told shareholders to expect some uplift in the company’s share price on the back of drilling beginning, but said it would be a while before a dividend was paid to investors.

Mr O’Reilly also underlined that Providence is — for the foreseeable future — totally focused on its Irish and British assets (its only real “cash cow”, at present is the Singleton oil field in the south of England) despite having identified offshore Canada as being similar in potential quality to Ireland.

He said the company wouldn’t be looking at new markets, unless through an asset swap sometime down the line, as its applications in the Government’s latest licensing round could add another three-to-five projects to its already bulging portfolio.

On that footing, Mr O’Reilly re-iterated Providence’s ultimate desire to dispose of its near-7% stake in the still under-developed AJE field off the coast of Nigeria. While that could net the company up to $30m, a deal depends on the larger partners developing the asset.

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