DUBLIN-BASED oil and gas exploration company Providence Resources will more than triple its oil production levels by 2014, chief executive Tony O’Reilly jnr predicted at yesterday’s annual general meeting.
This projection came as the company announced that it expects to raise €16.8 million through a private placement of roughly 431 million shares to institutions in the UK.
Mr O’Reilly confirmed to shareholders that the placement will dilute shareholdings, but explained that a focus of management is to deleverage. The funds raised in the placement will be used to strengthen the company’s balance sheet by reducing debt and providing working capital.
Last week Providence announced that it had secured the option to acquire 40 per cent of the Kinsale Head gas fields, through its subsidiary Eirgas. Mr O’Reilly said that the deal will enable Providence to expand into the “incredibly lucrative” gas storage market. There is currently a lack of gas storage capacity in Ireland and the UK, he said.
He also confirmed that the company’s Nigerian Aje field has been deemed a commercial discovery. “We’ve decided that it should stay within our portfolio,” he said.
Providence expects to grow its oil production rates to 3,000 BOEPD (barrels of oil equivalent per day) by the year end, and to 10,000 BOEPD by the end of 2014.
Although oil prices have collapsed in the last year, Mr O’Reilly described this was “an aberration”. The company’s revenue increased by more than 400 per cent to €24.81 million in 2008. A once-off asset impairment charge of €49.74 million resulted in a loss of more than €51 million.
