Providence to raise €42m for Celtic Sea drilling

PROVIDENCE Resources is to raise €42 million, via the placing of convertible bonds with institutional investors, to be invested on further developing its interests in the Gulf of Mexico and this summer’s planned Celtic Sea drilling phase off the south coast of Ireland.

The bonds — which have already been placed on both the IEX market in Dublin and London’s AIM market — are denominated in units of €100,000 and carry interest of 12% per annum and mature in July 2012.

Bond holders will also have the option to convert them into ordinary Providence shares at a price of 10c per share, any time on or after September 29 this year. The conversion price represents a 19% premium to the shares’ closing price on July 21 of this year, which was the date on which the company agreed the final terms of the bonds.

“In particular, the proceeds of this issue will allow the company to pursue its Celtic Sea drilling programme this summer as well as giving us flexibility to invest in new opportunities in the Gulf of Mexico.

“We are particularly satisfied, given the current volatility of the equity and debt markets, to have successfully completed this financing,” said Providence chief executive, Tony O’Reilly Jnr.

Earlier this summer, Providence announced the €43.5m acquisition of the Gulf of Mexico-based assets of US company Triangle Oil and Gas and, separately, said that it had found gas at the Galveston Island well — which it co-owns — in the same area.

In June, the company updated on its plans for its previously announced drilling programme for the Celtic Sea — saying work would get underway in August, after the drilling rig was secured.

It added, yesterday, that it has taken delivery of the Global Santa Fe Arctic II semi-submersible drilling rig for work at its Hook Head and Dunmore projects.

The rig is being mobilised and drilling is expected to get underway in the next two weeks.