Providence awards €640,000 of share options to five directors

Oil and gas explorer Providence has awarded share options worth almost €640,000 to its chairman Pat Plunkett and four non-executive directors.

The news comes just days after the company agreed a €19 million deal with a local subsidiary of French giant Total which sparked a surge in the value of its shares.

Providence said it had granted options over 1.75 million shares to Mr Plunkett, 800,000 to non-executive Angus McCoss and 400,000 each to their board colleagues Lex Gamble, James McCarthy and Philip O'Quigley.

The company set the option price at 17 cent, valuing 3.75 million shares at €637,500. The stock closed at 18 cent valuing 3.75 million shares at €675,000.

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Corporate governance rules discourage granting share options to non-executives for companies with full stock-exchange listings as this could compromise their independence.

Providence does not have a full listing as its shares trade on London’s Alternative Investment Market and Dublin’s enterprise securities’ market. As both are tailored for smaller and developing companies their governance rules are less strict.

The directors can exercise half their options after one year provided that the shares’ value has increased by at least 25 per cent and maintained that for three months before being taken up.

They can exercise the balance after two years subject to the same conditions as the first tranche. The directors have up to seven years to exercise their options.

Providence pointed out that the shares amount to less than 0.7 per cent of the company.

Mr Gamble, Mr McCarthy and Mr O'Quigley all received 400,000 options in August last year in place of directors' fees and on condition that they relinquish 640,000 options previously given them.

Providence’s move means the four non-executives now have options over 800,000 of the company’s shares, while Mr Plunkett has 1.75 million.

Earlier this week Providence announced it was giving Total a 35 per cent interest in its Druid Drombeg licence area, 220km off the Kerry coast, for $21.6 million (€19.4 million). Its stock rose more than 8 per cent in response to the news.

The company did not comment beyond the statement issued to the markets yesterday.