Irish oil and gas exploration group Providence Resources said yesterday that it would know by the end of September whether its Hook Head project in the Celtic Sea will be commercially viable.
Addressing shareholders at the group's agm in Dublin yesterday, chief executive Tony O'Reilly jnr said he was "particularly excited" about the potential of the field, adding that, if successful, this would be "a very important moment" for the company. The drilling rig is due to be delivered to the Hook Head site at the end of July and is scheduled to remain there for 50 days. At the end of this time, or possibly after only about 30 days, Providence will know whether there is enough resource to produce oil or gas commercially, Mr O'Reilly jnr said.
"A successful drilling and testing of Hook Head is paramount to establishing a business from which we can establish infrastructure," he said. If successful, Providence hopes to build infrastructure in the Celtic Sea which would then be used by other producers in the area.
Looking back on 2006, when the group recorded a 35 per cent increase in profit to €143,000, Mr O'Reilly jnr said that it had been a very busy year. However, he said that 2007 was likely to be even busier as the group sought to increase production capacity through better exploitation of the Singleton field in the UK and further strategic acquisitions, as well as carrying out a significant exploration programme.
Asked about the failure of the share price to rise above 8 cent, Mr O'Reilly said that the market was waiting for positive drilling news, which he hoped would come from Hook Head. According to John O'Sullivan, Providence's exploration manager, the project has an 85 per cent chance of being successful.
The shares added nearly 4 per cent yesterday, closing at €0.079.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)