Providence trims losses by €40m

INCREASED production levels helped to cut losses at Providence Resources by €40 million last year.

The Dublin-headquartered oil and gas exploration company, which is headed up by Tony O’Reilly Jnr, yesterday reported a pre-tax loss of €10.9m for 2009 – down from just over €50m in 2008. The company’s net loss fell from €51.2m to €9.8m.

However, the delay in some US-based production coming back on stream – due to hurricane activity – and lower commodity prices meant that revenue fell from €24.8m to €21.2m.

Providence’s annual production grew by 28% last year, from 433,625 barrels of oil equivalent (boe) to 557,927 boe. The company is still hopeful of reaching 5,000 barrels of oil equivalent per day (boepd) by 2012 and could even pass its previous target of 10,000 boepd by 2014, due to increased drilling and exploration activity.

Mr O’Reilly said that 2010 will be “a key year” for Providence, with a number of projects due to advance to drilling stage.

“This, combined with a growing production base and the potential to realise the value being created in both our Eirgas gas storage and Exola heavy oil interests, gives us real confidence for the future. We are also continuing to look at future opportunities that can deliver appreciable value creation, both in Ireland and further afield.”

However, Mr O’Reilly refused to comment on updates regarding drilling timeframe for the hotly tipped Dunquin prospect, off the west coast of Ireland, in which Providence has a 16% stake – although work is expected to begin sooner rather than later.

He didn’t, however, totally dismiss the possibility of the company disposing of some of its lower profile assets.

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