Providence reveals drop in revenue

Providence Resources has revealed a drop in revenue in its interim report and financial statement for the six months up to June 30, 2009.

It has revealed that it bought 40% of the Kinsale Head gas field from Petronas which doubled its production in the area to 4,000 BOEPD.

In the UK, the firm increased its oil production in the Singleton SNX-10 development well.

However, revenue for the period, €10.5m, was down €700,000 from the same period last year and the company attributed this to a combination of lower commodity prices and production levels being impacted by hurricanes.

Tony O’Reilly, Chief Executive of Providence Resources, said: “Despite the tough global economic environment, the results for the first half of 2009 demonstrate a range of successful activities across the Company’s broad portfolio. Most notable was the exercising of the Option to acquire a 40% interest in the Kinsale Head area assets from PETRONAS, the drilling of the Singleton SNX-10 development well, the deeming of AJE to be commercial, the farm out by ExxonMobil to ENI of a 40% interest in the Dunquin prospect and the subsequent decision by the ExxonMobil-led partnership to commit to an exploration well.

“Providence is now active in four areas – oil and gas production, asset appraisal and development, high impact exploration, and gas storage – each of which is growing.

“Our extensive plans for field enhancement at Singleton, combined with our ongoing activities in the Gulf of Mexico, give us confidence that we will achieve our production target of over 3,000 BOEPD. This, combined with the attributable 2,000 BOEPD from the Kinsale Head assets, should take our overall production to 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 (such as AJE, Spanish Point and the Celtic Sea portfolio), will bring managed growth to our core businesses. The exploration portfolio has maintained its evolving momentum - as evidenced by this summer’s farm out to ENI - and the subsequent decision by ExxonMobil to commit a well on the Dunquin licence is testimony to the world class qualities of the resource potential of this acreage. It also validates our commitment to building the largest portfolio of exploration acreage off the west coast of Ireland.

“The EIRGAS transaction to acquire the Kinsale Head assets is a transformational deal for Providence. It allows us to capitalise on our extensive operational experience offshore Ireland and, with the assistance of PETRONAS’ capabilities in gas production, storage and trading, it will substantially increase our daily production rates. Most importantly of all, it will see Providence enter the gas storage sector, which we see as a significant future growth area.

“We are delighted to have arranged a new $100m financing facility with BNP Paribas, one of the world’s leading natural resource banks. This demonstrates our growing maturity as a diversified E&P company, and gives us the flexibility to expand our core businesses.

“We view the 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.”