Providence losses widen

Irish oil and gas exploration firm Providence Resources said revenue rose in the first half of the year, but pretax losses widened as the company was hit with a €28 million impairment charge.

According to its interim results, revenue from continuing operations increased by 35.5 per cent to €7.746 million in the six months to the end of June. However, the company posted a loss from operating activities of €27.86 million, mainly due to a €28.3 million impairment charge linked to the firm’s UK onshore assets.

That brought pretax losses to €29.73 million, compared with €9.8 million.

Providence has high hopes for its Barryroe resource, which earlier this year reported successful drilling and flow rates.

Chief executive Tony O’Reilly said Barryroe represented only the first stage of Providence’s drilling programme, and there had been progress in a number of other projects in the period, including the successful completion of the Spanish Point site survey, the signing of a letter of intent for a deepwater rig to drill the Dunquin prospect by ExxonMobil, and the foreshore licence application to drill an exploration well on the Dalkey Island prospect.

“As the leading Irish-focused E&P company, it is important that we continue to lead the way in building on the momentum created by our success and take full advantage of the advances in technology, infrastructure, the favourable fiscal regime and higher oil prices as we look to unlock the region’s substantial hydrocarbon potential,” he said.

In a separate announcement today, the company said it had signed an agreement with IGas Energy to sell Providence’s onshore UK producing, development and exploration assets.

IGas will acquire Providence’s 100 per cent interest in the Singleton oil field, and its 50 per cent operated interest in Petroleum Exploration and Development Licence 233, both of which are located in West Sussex.

IGas will pay $66 million for the assets, and Providence plans to use the money to pay down $44 million in outstanding debt to Deutsche Bank. The remainder fo the money will be used as working capital.