Providence Resources shares jump despite Barryroe owner quelling merger chatter  

Barryroe co-owner Providence Resources has denied it is in merger talks with its main development partner. Picture: Finbarr O'Rourke / File

Shares in Irish exploration company Providence Resources have jumped on the back of merger speculation surrounding the company, despite it moving swiftly to deny all rumours.

Investors were also buoyed by Providence gaining Government approval to continue development work at its Barryroe oil and gas field off the Cork coast. 

The company’s shares were up by over 4.6%, having at one stage risen by as much as 7.6%.

A weekend report said Providence had been approached by Norwegian firm SpotOn Energy over a potential merger.

SpotOn led the consortium of investors that finalised a long-awaited €139m development partner deal with Providence regarding Barryroe, in November. The deal gives the consortium a 50% stake of Barryroe, with Providence holding 40% and junior partner Lansdowne Oil and Gas controlling 10%.

However, despite the pending close working partnership, Providence said no merger talks are taking place.

“While Providence, like any plc, considers all opportunities to maximise shareholder value, we are not currently involved in any merger discussions with any party,” it said in a statement to the stock exchange.

Providence said it will continue to work with SpotOn to deliver the necessary funding to develop Barryroe.

That development has cleared another hurdle, with the Government granting approval for the carrying out of a site survey at Barryroe.

“With this approval now in place we can begin the detailed work required to complete the environmental and regulatory approvals for the appraisal and development of the Barryroe oil and gas field,” said Providence chief executive Alan Linn.

The Barryroe partners are targeting a drilling campaign getting underway towards the end of 2022. 

Last September, Mr Linn said Providence was aiming to fast-track production at Barryroe, with the drilling of a number of production wells being preferred instead of further appraisal test wells.

Barryroe could become a commercial energy supplier within 18 months of drilling beginning.

The Government giving the green light for a site survey at Barryroe comes a week after environment minister Eamon Ryan effectively copperfastened into law a ban on the issuance of future oil and gas exploration licences in Irish waters.

However, while the bolstered Climate Action Bill will significantly dent future fossil fuel prospecting in Irish waters, existing licences — such as Barryroe — will remain exempt from the ban and will be allowed to proceed.

Mr Linn has consistently branded Barryroe “a project of national importance” given that Ireland is currently importing 100% of its oil and nearly 70% of its gas requirements.

Mr Linn said the rationale for a future ban on exploration is questionable “as it limits Ireland’s options for energy security in the future”.

He has also, previously, called the future ban “a lost opportunity” as it has driven oil majors, who would have invested in Ireland’s transitioning from fossil fuels to renewable energy away from Ireland.