Providence shares fall steeply on drilling failure

Providence Resources has hit a second major setback in the Porcupine Basin after summer drilling at the Drombeg well 220km off shore failed to hit oil and has been abandoned. The shares, which had one stage plunged by a third, ended the session 16.5% lower.

Chief executive Tony O’Reilly acknowledged “disappointment”, but cost-sharing at the failed well will help cushion the financial effects for Providence, as Cairn Energy and Total have shouldered a significant part of the drilling costs. For investors, the setback puts the focus back on Providence’s main prospect at Barryroe, in the North Celtic Sea Basin, where drilling could take place next year or in early 2019.

Analysts said that the failed programme turns the spotlight on the drilling plans.