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Providence reports €20.5m loss as exploration firm looks to new oil prospects

Providence Resources has announced losses of €20.5m for 2016 while operating losses for the period were €18.8m, an increase of €5.7m from 2015.

In June, the oil exploration company raised $70m in a share sale in an effort to reduce the company’s debt.

The company had no net debt at the end of 2016; in comparison, net debt at the end of 2015 was €18.2m.

In March 2017 Providence agreed a deal with Capricorn, a subsidiary of Cairn Energy, for Capricorn to become involved in its drilling programme for the company’s Druid & Drombeg Oil Prospects.

Providence has said that the Druid prospect has the potential to deliver 3.2 bn barrels of oil, while Drombeg may yield a further 1.9 bn barrels.

The deal will see Capricorn taking a 30pc working interest in the project, in return Capricorn will pay 45pc of the cost of drilling as well as a cash payment of $2.82m.

Operations are scheduled to commence on this project in June 2017.

“2016 was a year of significant operational & financial progress for Providence,” CEO Tony O’Reilly said.

“With drilling set to commence at Druid & Drombeg, fast growing interest in offshore Ireland from global majors, ongoing commercial discussions and renewed financial strength, 2017 looks set to be another significant year in our company’s development.”

Earnings per share at end of 2016 were €5.80, a significant fall from the end of 2015 when they were €19.57.
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