Irish explorer Providence Resources said Tuesday that it remains "well-placed" to deliver its plans and that it continues to be optimistic about the Irish oil and gas sector in spite of a challenging industry backdrop.
In its half-year report, Providence said that recent market developments have signalled some positive changes, with increased M&A activity and significant industry interest in the Irish Atlantic Margin licensing round representing "encouraging signs".
Meanwhile, the firm has begun a cost-reduction program which it believes will deliver "meaningful savings" in the future.
"Providence remains fully committed to offshore Ireland, an area with both exceptional prospectivity and internationally competitive cost and operating dynamics," Providence CEO Tony O'Reilly said in a statement.
"The potential of the area has been further enhanced by the post well analysis of our Dunquin North exploration well combined with the major oil discoveries in the Flemish Pass Basin, offshore eastern Canada. We believe that first gas from Corrib, together with the record high level of applications for the 2015 Irish Atlantic Margin Licensing Round, are defining moments for the Irish offshore, only serving to further enhance the value of our exploration and appraisal portfolio."
Providence noted that farm out discussions regarding its Barryroe discovery are continuing with a number of third parties. Meanwhile, it pointed out that updated well modelling of its Spanish Point gas condensate field in the northern Porcupine Basin indicates that the original vertical well there has an undamaged flow potential of 10,700 barrels of oil equivalent per day.
At the firm's Drombeg oil prospect in the southern Porcupine Basin, 3D seismic morphologies are consistent with a large Lower Cretaceous deepwater fan system. Providence has also conducted technical updates to 2D and 3D seismic data acquired in 2014 across a range of other offshore Ireland prospects, while initial work on the Silverback oil prospect in the south Celtic Sea Basin indicates oil in place of more than 1.3 billion barrels.
Providence's operating loss during the first six months of 2015 was EUR 3.8 million ($4.3 million), compared with EUR 3.1 million ($2 million) in 1H 2014. At June 30, 2015, the firm's cash and cash equivalents stood at EUR 11.3 million ($12.8 million), while its debt was EUR 15.6 million ($17.6 million).
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