Providence aiming to fast-track Barryroe oil and gas production
Irish exploration company Providence Resources is aiming to fast-track production at its flagship Barryroe oil and gas field off the Cork coast and is confident of having development partners for the project formally in place within the month.
Chief executive Alan Linn said Providence’s ambition is to bring Barryroe to production stage as early as possible, saying that is what the field needs. He said the company now favoured drilling a number of production wells instead of further appraisal test wells.
Barryroe could reach production within 18 months, but gaining Government approval, and meeting regulatory standards — including an environmental impact assessment and rig approval — could still heavily delay work.
Mr Linn said Providence’s already agreed Bar ryroe farm-out deal — which will see a consortium including Norwegian company SpotOn Energy and oilfield services giant Schlumberg er buy control of and develop the project — should be formally completed by the end of October.
He said he is confident the Government will approve that deal and the production
plan, on the grounds of Barryroe being “a project of national importance” at a time when Ireland is importing 100% of its oil and nearly 70% of its gas requirements.
“Energy security is essential for a strong economy,” Mr Linn said, adding that Barryroe can make “a significant contribution” to the Irish economy and deliver direct long- term financial benefits and employment to Cork. It is expected that the
new consortium will take a 50% stake in Barryroe, with the remainder split between Providence and junior partner Lansdowne Oil and Gas.
Mr Linn said Providence is now fully funded up to July of next year, following its emergency €3m cash raise in April, and has no need to tap shareholders for more funds.
An exercising of warrants by investors earlier this week raised a further
€540,000 for the company. If all remaining warrants from April’s share sale are exercised by investors Providence could realise a further €23.5m in funding.
Providence posted a €9.2m loss for the first half of this year, up from a loss of €5.5m for the same period last year and driven by financing expenses. Cost- cutting moves helped reduce its first- half operating losses from €5.3m to €1.1m.