Providence set to focus on assets off west coast

IRISH exploration company Providence Resources is to largely focus on its assets off the west coast of Ireland in the coming year.

The Tony O’Reilly-backed company yesterday published an end-of-year trading statement outlining its achievements over the past 12 months and pointing to areas of focus next year.

In it, the company’s chief executive Tony O’Reilly Jnr referred to the Spanish Point and Burren oil/gas discoveries, off the south-west coast, as being of particular note during 2010.

Providence holds a 56% stake in the Spanish Point asset and an 80% holding in the Burren. Initial 3D seismic study results on the two, conducted earlier this year, have been described by management as “highly encouraging”.

“The work planned on these two discoveries – taken together with the Dunquin exploration prospect, where a well commitment has now been made – confirm that the Irish Atlantic margin has become the focus of growing and material industry investment,” said Mr O’Reilly.

He added: “Providence enters 2010 with a clear strategy, strong partners and a growing reserve base, together with a maturing and dynamic asset portfolio. Combined with the solid financial base of growing production cash flow and the new BNP Paribas credit facility, I remain confident that Providence represents a strong long-term investment proposition for shareholders.”

This year saw Providence increase production in its main assets in Britain and the US, agree a new banking facility and finalise its move into the lucrative gas storage and trading market by acquiring – via its Eirgas subsidiary – a 40% stake in the Kinsale Head gas field from Malaysian oil company Petronas.

Mr O’Reilly said that the company expects overall production levels to continue to grow towardsthe 5,000 barrels of oil equivalent per day (boepd) mark on the back of growth in the aforementioned assets.

Shareholders were told at this year’s annual general meeting that the company could reach the 5,000 boepd mark by 2012 and the 10,000 mark by 2014.

They were also told that the company had the capability to become debt free within the next three years.


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