Providence shares rise as Barryroe expert joins board

Market sees appointment of Andrew Mackay as vote of confidence in Irish prospect

Providence Resources: Barryroe Well

Providence Resources: Barryroe Well

 

Shares in Providence Resources rose on Friday as the oil and gas explorer appointed a British industry veteran and expert on its Barryroe project to its board.

Providence also said that the new non-executive director, Andrew Mackay, founder and chairman of Aberdeen-based oil well management company NRG Group, holds an almost 1.7 per cent stake in the company. It is understood he bought most of the stock as the company completed a $3 million (€2.7 million) fundraise in May.

Mr Mackay (69) first came to Ireland in the late 1970s with US oil field services company Halliburton and, during his 40 years working in the industry, also worked as a drilling engineer with Saudi Aramco and in the UK government’s oil and gas division.

NRG provided services on the Barryroe project between 2011 and 2012, when the field was discovered to have 346 million barrels of oil equivalent.

Mr Mackay’s emergence as a large shareholder and board director is being seen in the market as a strong vote of confidence by a Barryroe expert in the field’s commercial prospects. Shares in Providence closed up 3.4 per cent at 3.8p in London, off its earlier highs.

Two so-called farm-in agreements – struck in 2015 and 2018, respectively – to develop the project fell through after the selected partners, most recently Chinese company Apec, failed to come up with the necessary funds to complete a transaction.

In April, Providence selected a preferred new farm-in candidate, Norwegian oil field development company SpotOn, with a view to striking a deal by the end of October.

Providence’s chief executive Alan Linn estimates an initial phase at Barryroe would at breakeven levels with oil trading at about $26 a barrel. Brent crude is currently trading at about $43 a barrel.

Mr Linn, who took over as chief executive in January after Tony O’Reilly jnr quit late last year following a tumultuous period for the company, has said that the oil field would be “economically compelling” with oil prices at $50-$60 a barrel.