The new chief executive of oil and gas explorer Providence – which has been hit in recent years by disappointing drilling results, a failed stake sale in its Barryroe oil prospect and dwindling cash – said he was convinced to join the company because of the “quality” of its key asset.
"If Barryroe had not been the quality reserve it is, I would not have come on board," said Alan Scott Linn, who took over as chief executive in January after the company's long-standing head Tony O'Reilly quit, told The Irish Times on Thursday. "I've looked at the asset independently and it's not been found wanting."
Providence, which raised $3.76 million (€3.36 million) in a share sale last September to shore up its cash position, is currently seeking to raise further funds – most likely through another stock placing – as it only has enough working capital to cover its costs until early April.
Mr Linn, a chemical engineer with 35 years’ experience in the oil and gas industry, declined to discuss how much Providence is looking to raise. Still, he said that the aim “is to fund the business to the right conclusion” of a Barryroe stake sale – or what’s known in the oil industry as a farm-out.
The field, located in shallow waters 50km off the Cork coast, was found in 2012 to have 346 million barrels of oil equivalent. However, two farm-out agreements – struck in 2015 and 2018, respectively – fell through after the selected partners, most recently Chinese company Apec, failed to come up with the necessary funds to complete a transaction.
Providence said last month that “a number of companies are actively assessing” data on the field, including newly-interested parties attracted by the project’s gas potential.
Funds from a farm-out accord will initially be used for drill appraisal wells to confirm whether the reservoir is a large oil field with a gas cap or a large gas field surrounded by an oil rim. This will determine how the project will be brought to production.
Mr Linn said that Barryroe “didn’t get sufficient attention” from Providence in the past as the focus was on deep water exploration.
The company's shares were hammered in the latter half of 2017 when it abandoned its Druid and Drombeg prospects some 220km off the southwest of Ireland after initial drilling revealed little more than water in the reservoirs.