Providence to sell UK interests as losses rise
IRISH EXPLORATION firm Providence Resources is to sell its onshore UK licence interests for $66 million (€51.3 million), the company announced yesterday, after posting increased pre-tax losses for the first six months of the year.
Revenues at the Dublin-based oil and gas company rose 35.5 per cent to €7.746 million in the six months to the end of June.
However, the company was hit with a €28.3 million impairment charge resulting in a loss from operating activities of €27.86 million.
This brought pre-tax losses to €29.73 million, compared to a loss of €9.8 million at the same time last year.
Providence said yesterday it had signed an agreement with IGas Energy to sell its onshore UK producing, development and exploration assets for $66 million, $44 million of which will be used to pay down outstanding debt to Deutsche Bank.
The remaining money will be invested into Irish drilling programmes, particularly the Barryroe resource, according to Providence chief executive Tony O’Reilly.
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.
“Whilst the asset has performed well for us over the years, it has become less of a focus following our recent Irish drilling success,” Mr O’Reilly said.
Providence has high hopes for its Barryroe field off the coast of Cork, which earlier this year reported successful drilling and flow rates.
“The drilling, testing and post-well analysis of Barryroe has exceeded expectations and we now look forward to advancing this large oil project towards development,” Mr O’Reilly said.
However, 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 and the foreshore licence application to drill an exploration well on the Dalkey Island prospect, he added.