Providence Resources makes profit of €1.49m

EXPLORATION COMPANY Providence Resources posted a profit before tax of €1.49 million last year, turning around a deficit of nearly €1 million in 2006.

Profit after tax stood at €569,000 in 2007, compared to a loss of €1.6 million in the preceding year. Turnover more than doubled to €4.3 million, with the majority of the revenue for the year coming from the company's interest in the producing UK onshore Singleton oil field.

Last November, Providence increased its stake in Singleton from 20 per cent to 99.125 per cent. The company also received some revenue from its 5 per cent interest in the High Island A-268 field, which began operations in August 2007.

Turnover also benefited from the higher oil price in 2007, with the average oil price per barrel at $72 compared with $65 in 2006

Refinancing of the company and a substantial debt line of $250 million from specialist energy bank Macquarie enabled Providence to make a great deal of progress in the past year, according to Davy analyst Job Langbroek. "Providence used this capital to build its production base, chiefly in the US, with a view to becoming a self-financing business and to drill and build a portfolio of exploration assets offshore [of] Ireland," he said.

"The group has developed very rapidly in a short space of time, using the high oil and gas price environment to full advantage. With more activity ahead, Providence is well placed to make further progress on the back of a growing and material portfolio of significant oil and gas assets."

Chief executive Tony O'Reilly said 2007 had been a highly successful year both operationally and financially for the company and that 2008 had started off even better.

The Singleton oil field deal in the UK and the recently completed $67.5 million purchase of Triangle Oil Gas, which brought Providence's production to 2,000 barrels of oil a day, were transformational deals for the company, he said.