Dunquin South oil firm running low on capital

PROVIDENCE Resources, the Irish-based oil and gas exploration company involved in explorations works off the Kerry coast, has warned it is running short of capital to continue its operations.

Last Thursday, Providence issued a warning to the stock market advising that, at present, it only has working capital to guarantee meeting its costs until the end of March or early April.

The company said that additional funding is needed to provide “sufficient working capital to support the business in the near term” and that the board is currently considering “all funding options”.

Providence’s current funding difficulties began with the loss of its Chinese partner in the exploration of the Barryroe prospect located south of Cork. It is currently seeking a new partner for the exploration and development of the prospect.

As well as the key Barryroe project, Providence is also involved in exploration of the twin Dunquin North and South prospects in the Porcupine Basin off the Kerry Coast.

Last June, Providence and its partner in the Dunquin South prospect, Eni Ireland, announced that they were postponing a well-site survey in the Dunquin South prospect.

Eni and Providence had previously approved a budget for the well-site survey, which was a condition of permission for drilling an exploration well in the Dunquin South prospect.

Providence has described the Dunquin South area as a “high-impact exploration prospect”.

The offshore block containing the prospect is located 200 km off the south-west coast of Ireland in a water depth of 1,500 meters.

Last September, Providence set out details of a plan to re-engineer its business model, and the company has now completed a redundancy programme that has “materially reduced the cost base”.

Currently, the company said in its announcement last week, “all exploration licences are being reassessed based on cost and relevance to the new business model”.

Stock Image A north sea oil rig. Provident Resources, which is involved in oil exploration operations off the Kerry Coast, has issued a warning about its dwindling operating capital.