12-15C
A mainly dry day with sunny intervals.

Find a...

Date Job Car Home















Share price may double as Barryroe oil of better quality than first anticipated

Independent tests carried out at the Barryroe oil discovery, off the Cork coast, have judged that the oil found by Providence Resources is of better quality than first anticipated.

The news has prompted analysts to suggest that the company’s share price may double in the next 12 months.

The Barryroe field — which lies 50km off the south coast — marks the first stop in Providence’s two-year offshore Ireland drilling round and is set to become a commercial field inside the next three years.

Within the space of one week in March, Providence announced initial oil flow rates of 3,500 barrels of oil per day (bopd) — far in excess of initial 1,800 bopd estimates — and a gas bearing zone, producing initial flows of 1,350 bopd, which could rise to full flow rates of 3,350 bopd.

Yesterday’s results of a third party assay confirming high quality light sweet waxy oil justify the company’s focus on Ireland, according to chief executive Tony O’Reilly Jnr.

“The results of this Barryroe oil assay vindicate our proposition that high value crudes exist in the shallow waters off the south coast of Ireland.

“Our well-testing results, and subsequent horizontal modelling, has demonstrated that these crudes can be produced at commerciallyattractive rates.

“Our post-well studies are continuing apace and we look forward to providing further updates over the coming months,” he added.

Job Langbroek, exploration analyst at Davy Stockbrokers, agreed — saying that the latest news marks “a welcome vindication” of the oil quality at Barryroe.

“This is good news for the group and will support a commercial development of the Barryroe reservoirs. With the well demonstrating that oil can be readily produced, the surface characteristics of the oil suggest that there is no reason why, with proper handling facilities, it shouldn’t be very commercially attractive,” he added.

On the back of Barryroe and the rest of the 2012/2013 planned drilling campaign, Davy has suggested Providence’s share price could rise to around £14 in London. The stock is currently trading at around £5.50 on the AIM and €6.70 on the Iseq in Dublin.

© Irish Examiner Ltd. All rights reserved

Home

More from the Irish Examiner