Providence posts €41.6m loss

Exploration company Providence Resources has posted a net loss for 2010 of €41.6m, attributed to the sale of its Gulf of Mexico assets.

The company said continuing operations accounted for a yearly loss of €9.8m, with a loss from discontinued operations of €31.8m.

Revenue for the year to end December was €11.08m, compared to a figure of €11.783m for the previous year.

"We took a strategic decision to divest our portfolio of non-operated assets in the Gulf of Mexico, which was the main reason for the significant loss for the year," said Chief Executive Tony O'Reilly.

The company's Gulf of Mexico oil and gas production portfolio was sold for a sum of up to $22m (€15.56m), comprising a cash payment of $15m with a deferred potential payment of up to $7m depending on certain performance criteria.

A placing of shares in March 2011 raised €47.6m.

The company said it continued to expand is production base onshore UK with a new well now in production, and also announced the largest drilling programme ever to be carried out offshore Ireland.

"Additionally, we took the decision not to proceed with the Kinsale Head Option for gas storage," O'Reilly said.

"However, we still see significant potential in gas storage and are therefore continuing to examine the feasibility of the Ulysses Project in the Irish Sea.

O'Reilly said the company was confident that Providence remains "a compelling long term investment proposition" owing to its "dynamic asset portfolio" which is now set to be the subject of a comprehensive drilling programme.

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