Providence Resources, the oil and gas explorer that owns the Barryroe prospect of the State’s southern coast, recorded losses last year of €26.8 million after writing down the cost of its prime asset, according to its annual results.
The financial statements, released to investors on Wednesday, also confirm it made a termination payment to its former chief executive, Tony O’Reilly Jnr, of €448,000 when he departed the company in a restructuring late last year.
He was paid a total of €865,000, including the termination payment, under a management contract covering the period from last April until his departure in December. He was subsequently replaced by Alan Linn.
The results statement also says independent director Angus McCoss will step down at Providence’s July annual general meeting of shareholders, as he plans to take up another role in the industry in an executive capacity.
The annual results show that Providence was down to its last €710,000 in cash at the end of 2019. It raised further financing from shareholders and subsequently secured commitments for a further €3 million from Norwegian group, SpotOn Energy, which will see it through to April 2021, it said.
The heavy accounting loss for 2019 compares to a loss of €4.8 million the previous year, according to the accounts. The directors of the group said 2019 had been a year of “setbacks”, most notably the collapse of a funding deal with Chinese group APEC, which had committed to funding a drilling programme for Barryroe but never produced the funds.
The directors said the accounts for Providence were prepared on a going concern basis but that a “material uncertainty” exists due to the ongoing talks with SpotOn, which has effectively bought a period of exclusivity until October to determine if it wants to go further on the Barryroe project.
The company also highlighted the Government’s “climate action agenda”, including a ban on future oil exploration, as a worry, but said it would not affect the Barryroe project or other existing licences.
Barryroe was valued at about €65 million in the accounts after a €23.8 million writedown.
Last week, Providence received the latest tranche of its its funding deal with SpotOn, which had been delayed due to the impact of lockdown measures.