Providence books €2.2m operating loss in first half of year

Providence Resources chief executive Tony O'Reilly jnr said there's a "good likelihood" the company will sell a stake in its Druid prospect off the west coast of Ireland before it starts drilling an exploratory well next summer.

While Providence ensured it had enough money to cover its drilling costs under a $70 million (€62.4 million) share sale in June, it has been talking to a number of “super major” oil firms for months on a so-called farm-out deal on the field.

Speaking to The Irish Times after posting first half figures on Thursday, Mr O'Reilly said "there is good interest" among potential partners for the prospect, which the company has claimed may ultimately deliver 3.9 billion barrels of oil. Drilling costs have slumped in the past year amid a drop in oil prices.

However, he said the company would be “very comfortable to move forward” without a stake sale in the Druid field, some 220km into the Atlantic Ocean.

Industry giants

This year has seen industry giants such as ExxonMobil, Statoil, BP, Eni and China National Offshore Oil Corporation, or CNOOC, successfully bid for options to search for oil and gas off Ireland’s shores, following what the Government said was a record level of applications.

Meanwhile, Mr O’Reilly said the company still aims to have secured a farm-out deal on its Barryroe exploration site, which was found in 2012 to have more than 300 million barrels of recoverable oil, by the end of this year. A previous agreement for Barryroe fell through last year after the chosen partner, known to be London-based Sequa Petroleum, failed to raise the necessary funds to participate.

Earlier on Thursday, Providence Resources said it posted an operating loss of €2.2 million for the first half of 2016, down from a €3.8 million for the same period last year.

The company said the market volatility that characterised the sector in 2015 continued this year, presenting the industry with significant commercial challenges.

The report is of little significance, however, as the group subsequently engaged in a massive refinancing, much of which was used to settle a remaining $4.77 million bill arising from a court battle with a drilling company that provided services for the Barryroe site and to repay its main creditor, Melody Capital, which was owed more than $20 million.