Providence Resources upbeat on Barryroe despite snub

Providence Resources boss Tony O’Reilly Jr has said landing a development partner for the company’s headline asset — the Barryroe oil and gas field off the Cork coast — remains the top priority despite a potential deal collapsing in the last few months.

“It remains our top priority to get a deal done as soon as possible, we’re still very hopeful and we’re very optimistic we can conclude a deal. It is our major focus”, Mr O’Reilly told shareholders at the Irish exploration firm’s AGM in Dublin.

He said the company would be working hard over “the next few months” to progress a deal, saying discussions are “ongoing with other interested parties”.

It is understood a number of ‘super-majors’ — a term typically used to describe the largest eight or so oil companies in the world — have begun to take interest in the Celtic Sea region and Providence is considering extending its acreage in the area in response.

Shareholders also learned that Providence came close to landing a development partner for Barryroe as it has on a number of occasions in the past at the end of last year, only for the unnamed party to back out in favour of investing in a package of North Sea-based assets.

The fact that a deal wasn’t finalised by the end of 2016 means that Providence has pushed out plans for an appraisal well, at Barryroe, until 2018 at the earliest.

Providence is currently involved in farm-out discussions on five of its asset areas in the Celtic Sea and off the west coast — the Barryroe, Spanish Point, Avalon, Newgrange and Druid/ Drombeg fields/ prospects — and Mr O’Reilly said that some of those development deals are at a very late stage of agreement.

“We’re not a one-trick-pony; we have a portfolio and an attractive array of opportunities which we are pursuing,” he said.

Mr O’Reilly said he isn’t concerned that increased merger and acquisition activity in the North Sea could divert interest from Irish waters, but did admit that while interest levels have improved it remains difficult to secure third-party partners for exploration and production projects.

In March, Providence successfully brought in Scottish explorer Cairn Energy via its Irish subsidiary Capricorn as development partner for its highly-rated Druid/Drombeg prospect in the southern Porcupine Basin off the west coast of Ireland.

A drilling campaign potentially taking up to two months and targeting around five billion barrels of oil is due to begin at that prospect in late June/early July, with Cairn, now a 30% owner of the asset, covering 45% of the associated costs.

In the wake of that deal, Mr O’Reilly said that Providence was confident of further deal activity and Ireland was very much “on the agenda of a lot of companies”.

He said that Providence was happy with the level of interaction it has been having with potential farm-in partners for its other assets.

Providence’s share price is up by nearly 9% since the turn of the year.

It was unchanged yesterday trading at 19c in Dublin.

It remains unclear when an appraisal well which was previously delayed but most recently planned for 2018 at Spanish Point, might take place.

Providence is also partnered with Cairn there and further farm-in partners are being sought.


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