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Providence Resources PLC

“Very exciting time” for Providence Resources as it gears up for Barryroe drilling in Q2 2019

“[The partnership and funding deal] puts Barryroe on a pathway to production which is ultimately what we’re all about as an oil and gas company," said CEO Tony O'Reilly

offshore oil field
Barryroe has an audited resource of 350mln barrels of oil

The boss of Providence Resources PLC (LON:PVR) has said it is a “very exciting time” for the explorer after it signed an updated farm-out deal with its Chinese partners at the Barryroe oilfield offshore Ireland.

Chief executive Tony O’Reilly talked about the deal, which ought to tee Barryroe up for production, in an interview with Proactive Investors.

READ: City broker approves of Barryroe deal

“[The partnership and funding deal] puts Barryroe on a pathway to production which is ultimately what we’re all about as an oil and gas company,” said O'Reilly told Proactive.

To earn its 50% interest into what will be Ireland’s first commercial offshore oil project, APEC has committed to funding a programme of four vertical wells and one horizontal sidetrack.

Drilling at the project, which has an audited resource of 350mln barrels of oil, is due to start in the second quarter of 2019, with the aim of validating Barryroe as a producing field.

“We’re going to drill four vertical wells plus an extended horizontal well which will allow us to fully appraise the Barryroe field,” the Irishman added.

“It is our flagship asset so we’re looking to take it from the appraisal stage through to pre-development and onto production. It’s a big step up for the asset.”

Between now and the start of drilling, O’Reilly said most of the company’s efforts would go towards getting all the necessary consents and permissions which would allow the drill bits to start turning.

As well as delivering the 200-day drill programme, APEC is also giving Providence a US$19.5mln cash advance to cover project and operational costs.

“We’re in a great [financial] position,” said O’Reilly.

“We have over €12mln in cash plus receivables coming in, no debt and we have no working capital requirements for the next few years.”

Providence shares rose 0.3% to 15p in early afternoon trading. They have now gained almost 50% since the start of the month.

Quick facts: Providence Resources PLC

Price: 4.075 GBX

Market: AIM
Market Cap: £26.79 m
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