Providence share price jumps 4c as it doubles Gulf of Mexico production

PROVIDENCE Resources, the Tony O’Reilly Jnr-fronted oil and gas exploration company, has announced a doubling of production levels at its Vermillion 60 field in the Gulf of Mexico.

The Dublin-based company holds a 50% stake in the asset, where – following re-completion activities carried out last month – production levels are now flowing at a rate of 10 million standard cubic feet per day of gas or 600 barrels of oil equivalent (boepd); which is double the level previously reported.

Providence’s share price jumped by more than 22% in Dublin yesterday to rise to 4c.

Just last month Providence reported a 473% jump in full year revenues for 2008 – to €24.8m – helped, in no small part, by rising oil and gas prices.

An operating loss of €51.93m was prompted by an exceptional charge relating to the write-down of assets in the Celtic Sea and without the impairment charge profits would have amounted to €7.5m. At the time of the results, Mr O’Reilly referred to the Singleton oil field in the UK and its Gulf of Mexico assets as being key growth drivers for the company going forward.

Further positive news for the overall Irish exploration sector came from West African Diamonds (WAD) – the AIM-listed diamonds and precious metals explorer and developer. That company said yesterday that it has commenced production at its Bomboko diamond mine in Guinea on schedule and within cost.

To date 261.6 carats have been produced from 4,200 tonnes of gravel at Bomboko, giving a grade of 6.2 carats per hundred tonnes (cpht).

“We are pleased with the grade and quality of diamonds being discovered. All equipment necessary to expand to 30,000 tonnes a month throughput is on site and being commissioned,” said deputy chairman, James Campbell.