Providence reports net loss of €6.6m

PROVIDENCE Resources has reported a net loss of €6.6 million for the first six months of this year, down from a profit of €3.25m for the same period last year.

The oil and gas exploration company said that its year-on-year fall in first half revenue – from €11.2m to €10.5m – was down to a combination of lower commodity prices and production levels (specifically at its Gulf of Mexico-based assets) being impacted by hurricane activity. Providence’s chief executive Tony O’Reilly Jnr said that management was viewing the company’s future “with optimism and confidence”.

“This is because our individual projects and our collective portfolio now exhibit a balanced risk profile ranging from production, storage and trading through field appraisal and development to high impact exploration – all backed by world class equity and financial partners,” he said.

On an operational level, Providence has had a strongly positive run recently both from drilling results at existing licences and its move into the gas storage and trading market, through the acquisition by its subsidiary company – Eirgas – of a 40% stake in the Kinsale Head asset, formerly owned by Marathon Oil. Mr O’Reilly said the Eirgas deal was “transformational” for Providence – pointing to the deal’s potential to substantially increase the company’s daily production rates and introduce it to the gas storage sector, seen as being a significant future growth area.

Mr O’Reilly also said he remained confident Providence will meet its production target of over 3,000 barrels of oil equivalent per day (boepd) this year and over 5,000 boepd by 2011.

“We remain convinced that this focus on production, combined with our strategy of unlocking value from existing development assets, will bring managed growth to our core businesses,” he said.