Revenue falls at Providence as price of oil weakens

PROVIDENCE RESOURCES said revenue fell last year as oil prices weakened and production was hit by bad weather.

Publishing its full-year results yesterday, the company said revenue fell to €21.1 million in 2009 from €24.8 million a year earlier, but its net loss narrowed to €9.8 million compared to €51.2 million in 2008.

The average oil price per barrel during the year was $88.23 compared to $111.07 in 2008.

Operating losses fell to €1 million in the year ended December 31st, 2009, from €42.2 million in 2008.

Chief executive Tony O’Reilly described the results as a “solid operational performance”.

The exploration firm reported progress on most fronts during the year. Annual production grew to 557,927 barrels, up 28 per cent from 2008’s figure of 433,625.

In appraisal and development, the company acquired 3D seismic data for well planning at the Spanish Point gas and Burren oil discoveries.

“Over the past five years, Providence has built up a sizeable and extensive portfolio of assets in the production, development and exploration areas in Ireland, the United Kingdom, the United States and west Africa,” Mr O’Reilly said.

The group had borrowings of €80 million at the end of the year, with a new loan facility from BNP Paribas accounting for much of this.

It raised €16.9 million from equity issues in June of last year.

The Dalkey Island prospect, meanwhile, was identified, and the company exercised its option to acquire up to 40 per cent of the Kinsale Head assets from Petronas. Providence also identified a possible site for the storage of natural gas.

“Looking ahead, 2010 is a key year for Providence with a number of projects now advancing to the drilling stage,” Mr O’Reilly said.

“This, combined with a growing production base and the potential to realise the value being created in both our Eirgas gas storage and Exola heavy oil interests, gives us real confidence for the future.”