Providence Boasts Strong Revenue, Production in 2008
Providence Resources plc has released its interim report and financial statements for the six months ended June 30, 2008.
- Revenue up 1,200% to $11.24 million (HI 2007: ?0.88 million).
- Profit from operating activities of $4.98 million (HI 2007: Loss $0.14 million).
- Net profit of $3.25 million (2007: Loss $0.26 million).
- Total assets treble to $130 million (HI 2007: $42 million).
- Fully diluted earnings per share of 0.13 cent (HI 2007: 0.011 cent loss).
- Commercial oil and gas price hedging program implemented successfully.
- Production has increased around sixteen-fold from 120 BOEPD to almost 2,000 BOEPD.
- Acquired Triangle portfolio of oil and gas assets in Gulf of Mexico for US $67.5 million.
- ExxonMobil becomes operator of Dunquin Prospect.
- Drombeg licence area awarded to Providence, ExxonMobil and Sosina.
- Successful AJE 4 appraisal well, offshore Nigeria.
- Galveston A-155 gas discovery, Gulf of Mexico.
SINCE PERIOD END
- Convertible bond offering in July 2008 raises $42 million.
- Providence completes offshore drilling campaign at Hook Head & Dunmore.
- Chrysaor farms into Spanish Point project in Porcupine Basin.
- Awarded Kish Basin Licensing Option, offshore Dublin, with Star/Petronas.
- Launched Ulysses Study Project with Star/Petronas.
- Awarded onshore UK license (50%) with Northern Petroleum.
- Awarded Barryroe Licensing Option (30%) in Celtic Sea.
Commenting on today's Interim Results, Tony O'Reilly, Chief Executive of Providence, said, "'The first half of 2008 has already seen a huge amount of successful activity, the most notable being the transformative acquisition of the Triangle Portfolio of oil and gas interests in the US Gulf of Mexico. This transaction, combined with other production interests, means that the Company has seen a very significant growth in its revenue base. However, it is important to note that only three months of revenue from the Triangle portfolio is included in these half year figures.
"Around three years ago, we articulated an aspiration to build up, from an already established platform, a diversified portfolio of exploration, production and development assets. Whilst there is still much to achieve, I believe that shareholders can feel very positive about the Company's balanced portfolio. We now have:
- World class exploration assets in the Porcupine Basin with ExxonMobil;
- A number of sizeable development assets in the Celtic Sea, some of which have recently been the subject of recent appraisal drilling program;
- A large development project offshore Nigeria;
- The Galveston A-155 development in the Gulf of Mexico, which is forecast to commence gas production in the first quarter of 2009; and
- Exciting development properties in the Gulf of Mexico as a result of the Triangle acquisition.
"Most importantly, we are in a strong financial position with sizeable production at a time of robust oil and gas prices. This time last year, we were producing c.120 BOEPD, which is roughly one sixteenth of our recent production levels.
"Since the half year, the Company has been busy across its portfolio. The capital raising of ?42 million via a convertible bond offering was a notable achievement in a very difficult market environment. These funds have been deployed for select drilling activities in the Celtic Sea and the Gulf of Mexico.
"On the drilling side, the results from the Hook Head appraisal well were disappointing and, due to the fact that the net hydrocarbon bearing intervals were substantially less than had been expected in the pre-drill estimates, the Company and its partners took the decision to plug and abandon the 50/11-4 well in order to minimize
"The rig was immediately mobilised to the Dunmore appraisal well location which has just completed. Whilst we are also disappointed with the Dunmore appraisal well results in the Jurassic sandstone reservoirs, we are very encouraged by the discovery of a new Jurassic carbonate reservoir interval in the 50/6-4 well. While this new carbonate reservoir is not significantly developed at this well location, it is possible that it may thicken considerably elsewhere in the block, which is why the partners have elected to suspend the well. Once we have completed the analysis of the well data and determined the final resource potential of the whole accumulation, we will be in a better position to complete our plans for any future specialist testing programme of the 50/6-4 well.
"In terms of additional drilling, the Company is currently finalizing its forward drilling plans. Drilling is currently being planned at Singleton, onshore UK, as well as on various Triangle opportunities in the Gulf of Mexico. The Crosby Prospect in the East Irish Sea Basin is also an agreed candidate for future drilling in the spring of 2009. These drilling activities will be financed from existing financial resources.
"Providence has a very clear strategy, with solid and growing cash flow from production, exciting exploration, appraisal and development projects, and new initiatives in the gas storage arena. Crucially, we are working with world class partners, including well known companies such as Star Energy (Petronas), Chevron, C.M.I. (Transocean) and ExxonMobil. We will continue to look for new production opportunities in different territories and look forward to outlining further details of our progress across the portfolio over the coming months. Considering all these elements, at a time of robust commodity prices, shareholders can look to the future with real confidence."
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