Providence to sell non-core assets as losses hit €41.6m

PROVIDENCE Resources is still likely to sell further international non-core assets despite the recent sale of its US operations, driving the company’s annual net losses to nearly €42 million as it focuses attention on its Irish and British portfolios.

The Tony O’Reilly Jnr-headed oil and gas exploration company yesterday reported a net loss of €41.6m for 2010, a figure mainly driven by the losses taken when selling its US operations in the Gulf of Mexico.

Those assets were, last month, sold for a maximum consideration of $22m (€15.5m), significantly less than the Dublin company’s original $65.5m purchase price.

Providence’s revenue fell, slightly, from €11.8m to just over €11m last year; while its loss per share increased from 36.03c to 125.3c.

Operating profit fell from €3.46m to €1.46m.

The company is now embarking on a multi-asset drilling round — touching on most of its assets in Ireland and Britain — this year and next, a move which the company and analysts have opined could transform the business.

“If it can demonstrate that it’s possible to deliver oil and gas value from offshore Ireland, it is in a first-mover position in most areas.

“This is what the next two years can deliver and is the primary investor attraction of the stock,” Job Langbroek of Davy Stockbrokers said.

While production levels slipped from 187,640 barrels of oil, to 185,151, Providence remains on course to reach 1,000 barrels per day by the end of this year and 1,500 per day within the next two years.

“Last year saw a huge increase in activity for us,” Mr O’Reilly said.

“We have assembled a balanced portfolio of drill prospects, while also ensuring that we have the appropriate partners for each specific asset,” he said.


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