Shares in Providence Resources jumped more than 10 per cent yesterday after the company said it had found gas at a second well in the Gulf of Mexico, a discovery that will double the group's overall production.
The Dublin- and London-listed group said the findings at the A2 well were in line with expectations and that production was on track to start towards the end of the month.
Providence has a 5 per cent working interest in the well, which equates to 50 barrels of oil equivalent per day (boepd).
At current oil prices of more than $70 (€50.80) a barrel, the latest discovery alone will generate about $3,500 a day for the Irish company.
Speaking to The Irish Timesyesterday, chief executive Tony O'Reilly jnr said the A2 well discovery was very exciting for two reasons: firstly, because it was unexpected; and, secondly, because the A1 and A2 wells will produce between 100 and 130 boepd when combined. This compares with the group's current production total of 120 boepd, all from the UK.
Production from the A1 well is due to start in mid-September.
To further its business, Providence has adopted a strategy of taking stakes in existing or near-production stage discoveries to boost its cashflow.
It then invests this money in its own exploration activities.
Providence has several exploration and development licences, including in the Celtic Sea and the Porcupine Basin off the coast of Ireland. The group is due to start drilling in the Celtic Sea soon.
Shares in Providence ended the day up 9.1 per cent, at eight cent, though volume was light.
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