‘Super-majors’ interested in refinanced Providence Resources

A number of so-called ‘super-majors’ — a term typically used to describe the biggest eight, or so, oil companies in the world — have shown interest in offshore assets held by freshly financed Irish explorer Providence Resources, its chief executive said yesterday.

Speaking after an egm, which saw shareholders approve a $70m fundraising via a share sale, Tony O’Reilly Jr said ‘super-major’ interest has been shown in Providence’s ‘Drombeg’ prospect in the Porcupine Basin off the south-west coast of Ireland.

Recent independent studies suggested Drombeg, along with the nearby Druid prospect could hold a combined five billion barrels of oil.

As well as paying off legal costs and legacy debt, Providence’s fund raise will go towards boosting working capital and could cover planned drilling activity at Druid next year.

Mr O’Reilly told shareholders doing a development deal on its flagship Barryroe field, in the Celtic Sea, remains the company’s “prime focus” and that a number of prospective partners have “re-engaged” over that asset since Providence announced its financial restructuring plans.

Providence remains hopeful of finalising a farm-out deal at Barryroe — possibly by the end of this year — before drilling an appraisal well sometime next year.

It is also hoping to tie-up a development partner for its Spanish Point asset off the west coast in time for appraisal drilling in 2018.

Mr O’Reilly said Providence’s board is not taking for granted the faith shareholders — both new and existing — have shown via the latest funding round, but said the company’s assets justify the move.

“We know we have to deliver on Barryroe,” he said, adding the company was in a “truly critical position” without the funds, having had to renegotiate with its chief lender when recently hit with unexpected legal costs relating to a long-running dispute with drilling services company Transocean.

Sam Wahab of Cantor Fitzgerald said Providence’s boosted capital position puts it in a “significantly stronger negotiating position” with prospective farm-out partners and retained his ‘buy’ recommendation on the Providence stock.