Providence upbeat after 2007 profit

OIL and gas exploration company, Providence Resources has returned to profit ahead of a busy year of potentially lucrative drilling activity.

The Dublin-headquartered company yesterday reported profits for 2007 of €569,000 after exceptional items — compared to a €1.6m loss in 2006.

Last year’s profit before exceptionals was €1.5m.

This year — long pencilled in as a critical performance indicator for Providence given that much of its long-planned drilling operations are due to commence — has started very positively.

Recently the company has made significant, high profile announcements.

These projects include saying that a seismic update programme on its Drombeg prospect off the south-west coast of Ireland is planned for next month, a gas discovery at its Gulf of Mexico operations with initial results exceeding pre-drilling expectations, successful early drilling at its AJE well off the coast of Nigeria and the acquisition of the Gulf of Mexico-based oil and gas portfolio of US company, Triangle Oil and Gas, for €43.5m.

The chance to acquire a majority stake in the Singleton oil field in the south of England and the discovery of oil at Hook Head in the Celtic Sea — as well as securing a rig, in a very tight rig market, for that discovery’s drilling round this summer — have also been identified as major keys to Providence’s upturn in fortunes.

“The combination of internally generated production cash flow, which more than covers our base operating activities, the new $250m (€161m) financing facility with Macquarie Bank and other general financing options means that we will be appropriately financed to continue to advance our extensive portfolio of appraisal, development and exploration assets,” Providence chief executive Tony O’Reilly Jnr said.

“We were in a strong position during the last year to take advantage of a number of opportunities,” he added.

Providence’s share price was up by 4.35% in Dublin, yesterday, closing at 12c.

Mr O’Reilly added that the company’s shareholders could now “look forward to the future with real optimism.”