Providence shares rise on Atlantic licence award

Shares in oil and gas explorer Providence Resources rose on Thursday after it said it had been awarded an offshore Atlantic licence option.

Providence, which saw its stock slide 5.5 per cent earlier this week after it unveiled a $74 million (€66 million) share sale, closed up over 4 per cent at 12.50 pence in London.

The jump in value came after the explorer confirmed it has been offered Licensing Option 16/27 over a 1,324km area in the Porcupine Basin, offshore Ireland.

The option area is located about 150km off the west coast of Ireland and is situated in c. 1,300 metre water depth.

The licensing option lies directly adjacent to and north of Frontier Exploration Licence 3/04, which contains the Lower Cretaceous Dunquin North residual oil column. It is also host to the Avalon System, which is seen as potentially being home to a big find.

“We are delighted to have secured this option over Avalon, which further demonstrates our growing position in the emerging Porcupine Basin Paleocene play,” said technical director John O’Sullivan.

“We are particularly encouraged with Avalon given its similarities to the nearby Druid prospect as well as its location adjacent to the Dunquin North residual oil accumulation which demonstrates the presence of an active petroleum system in this area,” he added.

Trading in Providence Resources resumed earlier this week after a two-month suspension. The stock was halted in mid-April due to a court battle with Transocean, which provided services for the company’s Barryroe exploration site.

Funds raised from Providence’s €74 million share sale will be used to meet payments arising from the court battle and to repay a credit facility and accrued interest to Melody Capital.