The proceeds of the Placing will be allocated to a number of specific identified projects and uses:
--The appraisal drilling of the Hook Head Project in the Celtic Sea in Summer 2007; --The ongoing development of the Company's other Irish offshore assets; --The proposed appraisal drilling, via a fourth well, at AJE, Providence's Nigerian asset in late 2007 (subject to rig availability); --Additional investment at the producing Singleton oil field, onshore UK, with a view to near-term cash flow; --Further possible investment in potential oil and gas developments in the Gulf of Mexico; and --General working capital purposes.
The two key development projects for 2007 are the previously announced appraisal drilling at Hook Head in the Celtic Sea, offshore Ireland; and further appraisal drilling at AJE, offshore Nigeria. Both of these are projects contain proven discoveries and both wells have been designed to establish the commercial viability of the projects, with the objective, on success, of moving forward to fast track development. The Company will also be looking to advance its portfolio offshore the West coast of Ireland, with particular reference to the planned drilling syndication of the Spanish Point Project.
In addition, the Company continues to seek opportunities that will enhance its production cash flow capabilities, complementing the recent announcement by the Company of its intention to acquire a majority stake at the onshore UK Singleton oilfield, which it is expected will, conditional on completion of the acquisition, significantly increase Providence's daily oil production rates to approximately 600 BOPD.
Tony O'Reilly Jr., Chief Executive of Providence, said:
"We are delighted today to announce this successful Placing, broadening our already strong shareholder base and attracting ten new UK institutional shareholders. The net proceeds of the Placing will be actively used to enhance the Providence portfolio of production, appraisal, development and high impact exploration assets.
"2007 is expected to be a very exciting year for Providence and its shareholders, and this fundraising, together with our diverse portfolio of interests and key industry relationships, consolidates our position, allowing the Company to maximize its potential in the current economic climate."
Cenkos Securities plc acted for the Company in the Placing with UK institutional investors. The Placing is conditional upon, inter alia, admission of the new Ordinary Shares to trading on AIM and IEX. Application has been made for the admission of the new Ordinary Shares to trading on both AIM and IEX ('Admission') and it is expected that Admission will occur and that dealings will commence on AIM and IEX on 17 April 2007. The new Ordinary Shares will rank pari passu in all respects with the existing Ordinary Shares currently traded on AIM and IEX. Following Admission there will be 2,466,531,324 Ordinary Shares in issue.
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