Prov­i­dence shares rise as Bar­ry­roe ex­pert joins board

The Irish Times - - Markets - JOE BREN­NAN

Shares in Prov­i­dence Re­sources rose yes­ter­day as the oil and gas ex­plorer ap­pointed a Bri­tish in­dus­try vet­eran and ex­pert on its Bar­ry­roe project to its board.

Prov­i­dence also said that the new non-ex­ec­u­tive di­rec­tor, An­drew Mackay, founder and chair­man of Aberdeen-based oil well man­age­ment com­pany NRG Group, holds an al­most 1.7 per cent stake in the com­pany. It is un­der­stood he bought most of the stock as the com­pany com­pleted a $3 mil­lion (¤2.7 mil­lion) fundraise in May.

Mr Mackay (69) first came to Ire­land in the late 1970s with US oil field ser­vices com­pany Hal­libur­ton and, dur­ing his 40 years work­ing in the in­dus­try, also worked as a drilling en­gi­neer with Saudi Aramco and in the UK gov­ern­ment’s oil and gas di­vi­sion.

NRG pro­vided ser­vices on the Bar­ry­roe project be­tween 2011 and 2012, when the field was dis­cov­ered to have 346 mil­lion bar­rels of oil equiv­a­lent.

Mr Mackay’s emer­gence as a large share­holder and board di­rec­tor is be­ing seen in the mar­ket as a strong vote of con­fi­dence by a Bar­ry­roe ex­pert in the field’s com­mer­cial prospects.

Shares in Prov­i­dence closed up 3.4 per cent at 3.8p in Lon­don, off its ear­lier highs.

Two so-called farm-in agree­ments – struck in 2015 and 2018, re­spec­tively – to de­velop the project fell through after the se­lected part­ners, most re­cently Chi­nese com­pany Apec, failed to come up with the nec­es­sary funds to com­plete a trans­ac­tion.

In April, Prov­i­dence se­lected a pre­ferred new farm-in can­di­date, Nor­we­gian oil field devel­op­ment com­pany SpotOn, with a view to strik­ing a deal by the end of Oc­to­ber.

Ini­tial phase

Prov­i­dence’s chief ex­ec­u­tive Alan Linn es­ti­mates an ini­tial phase at Bar­ry­roe would at breakeven lev­els with oil trad­ing at about $26 a bar­rel. Brent crude is cur­rently trad­ing at about $43 a bar­rel. Mr Linn, who took over as chief ex­ec­u­tive in Jan­uary after Tony O’Reilly jnr quit late last year fol­low­ing a tu­mul­tuous pe­riod for the com­pany, has said that the oil field would be “eco­nom­i­cally com­pelling” with oil prices at $50-$60 a bar­rel.

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