Providence Resources shares took a fresh tumble in Dublin in Monday – falling 37 per cent – as the oil and gas explorer told long-suffering investors they’ll have to wait a bit longer for the promised outcome of a strategic review of its key Barryroe prospect off the Cork coastline.
The board, completely overhauled in the past 18 months, with former KPMG partner James Menton becoming chairman in May, promised in September that it would complete a review by the end of 2021 to determine the strategic plan for the development of the field.
Investors have seen three Barryroe development partnership deals come to nothing in the decade since the field was found to have more than 300 million barrels of recoverable oil. The latest was abandoned in April.
Providence says now it will complete its strategic review by the end of January. But investors shouldn’t get their hopes up, because the company has decided that it still needs to drill an appraisal well to answer “key uncertainties impeding the future development” of the field. When is that expected? 2023. And the current estimate of when they’ll see the first drop of oil being pumped? 2026.
It wasn’t all bad news as far as the directors are concerned, with Providence disclosing in the middle of its 2,646-word statement that firms linked to half of its four-person board have landed lucrative contracts from the company.
NRG Well Management International, where non-executive Providence director Andrew Mackay is chairman, has landed a €115,000 gig to lead the recruitment and organisation of an expanded technical team around the Barryroe project.
Meanwhile, Cork-based PR guru Ann-Marie O’Sullivan, who joined the board in July, has seen her eponymous public relations company AM O’Sullivan PR secure an €81,000-a-year gig from the explorer “to develop a stakeholder management and communication strategy to enhance understanding of the Barryroe project and the opportunities it presents”.
That’s on top of regular directors’ fees, typically of the order of €45,000 at the company in recent years. And it’s not to mention the 4.5 million stock options each of the four new directors received on joining the board, even though such incentives for non-executives are frowned upon under the UK corporate governance code that also applies to Irish-listed companies.