Providence could see 500% share hike

Providence Resources could see a 500% jump in its share price this year if it successfully manages to conclude its mooted 40% farm-out at its highly-rated Barryroe field in the Celtic Sea, according to one London-based exploration analyst.

In a wide-reaching oil and gas report, London-based research house Liberum said it is anticipating world oil prices (Brent Crude), which were hovering around the $106.80 per barrel mark yesterday, to average $110 this year and stay at $100 over the long-term.

The company said that it remains ‘neutral’ on big oil stocks, but sees upside being offered by smaller exploration and production players, amongst them Irish firms like Tullow Oil, Circle Oil, Petroceltic and Providence.

Regarding the latter, Liberum said that the Dublin firm’s AIM share price — on the back of a successful Barryroe deal — could jump to £8.11 by the end of 2014. Providence was trading at around £1.26 in London, yesterday (and €1.59 in Dublin).

“Providence has the leading exploration portfolio offshore Ireland, with strong positions in many basins, just as industry interest in the country is increasing,” Liberum said, noting Barryroe (which could end up producing 100,000 barrels of oil per day at full-tilt) remains “the key event” for the company.

Meanwhile, while the recent postponement of drilling at the Spanish Point prospect, off the west coast, dented Providence’s share price, its operational partner in the area — Scottish firm, Cairn Energy — could see its share price rise by nearly 20% this year, according to Liberum.

The London analyst has also upped its annual share price target for Dublin explorer Petroceltic by 19% to £1.84 and Limerick-headquartered Circle Oil by over 100% to 45p. With regard to Tullow Oil, it sees scope for a 41% price increase from £8.01 to £11.25.

However, Tullow yesterday reported disappointing drilling results in Ethiopia.