Dublin-based oil and gas exploration company Providence Resources will triple its oil production rate by 2014, chief executive Tony O’Reilly Jnr said at today's annual general meeting (agm).
This projection came as the company announced that it expects to raise €16.8 million through a private placement of 431 million shares.
Mr O’Reilly confirmed to shareholders at the agm that the placement will dilute their shareholdings, but explained that a key focus of management is to deleverage the business.
The funds raised in the placement will be used to strengthen the company’s balance sheet by reducing debt levels and to provide working capital for future investments.
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.
He also confirmed that the company’s Nigerian Aje field has been deemed a commercial discovery. “We’ve decided that is should stay within our portfolio,” he said.
Providence expects its oil production rates to reach a target of 3,000 BOEPD (barrels of oil equivalent per day) by the year end, and to reach 10,000 by the end of 2014.
Although commodity, and more specifically oil, prices have collapsed in the last year, O’Reilly said that this was “an aberration”. “The world still needs hydrocarbons,” he said.