Providence Resources shares tank on fresh Barryroe drilling delay

Providence Resources shares tank on fresh Barryroe drilling delay

Providence Resources shares plummeted by more than 20% on the back of a further delay to planned drilling at the company's flagship Barryroe oil and gas field off the Cork coast.

The Tony O'Reilly Jr-led explorer now expects to begin drilling at Barryroe in the fourth quarter of this year, having initially targeted the third quarter as its start time.

Providence, via its subsidiary Exola, is still awaiting regulatory approval for a planned site survey permit for Barryroe.

It applied for a new surveying permit at the turn of the year following environment agency An Taisce challenging the legality of the Government's initial permission to grant a well-site survey late last year.

The move has also delayed the advancement of a $9m (€8m) project loan from APEC Energy, the leader of the Chinese consortium which came on board as Providence's development partner for Barryroe last year.

Providence is now expecting a regulatory decision on its permit around the middle of this month, at which time - if successful - the loan provision from APEC will be made available.

Nevertheless, the latest update from Providence will, according to Davy analyst Job Langbroek, "unsettle shareholders". The stock is down around 28% over the past 12 months.

Shortly after announcing APEC as its long-awaited development partner for the Barryroe project, last year, Providence earmarked a date around now to begin drilling.

The company sees Barryroe as being a key player in securing Ireland's energy supply.

The fresh Barryroe delay is the second setback for Providence this week, the company announcing on Tuesday that planned site survey work at the Dunquin South prospect, off the west coast, has been deferred - with no reason being offered - by its partner Italian oil giant Eni.

Providence owns a near 27% stake in that asset.

Meanwhile, fellow Irish exploration company United Oil and Gas has emerged as one of the big winners in the UK's latest offshore licensing round; being awarded four blocks in the central North Sea and licences - as part of a joint-venture group - in the English Channel.

The North Sea awards include the so-called Zeta prospect, which United Oil estimated could contain more than 90 million barrels of in-place oil.

As well as the UK, United Oil is active in Italy, Jamaica and Benin.

Chief operating officer Jonathan Leather said the company is continuing to evaluate further acquisition opportunities.

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