Providence Resources Plc, a Dublin-based energy explorer, may bring Celtic Sea crude ashore by 2013 as it seeks to make the first profitable Irish oilfield, said Chief Executive Officer Tony O’Reilly.
“We’re interested in trying to get as quickly to commercializing flowing oil as we can” at the Barryroe field, O’Reilly said yesterday in a telephone interview. “There are various development scenarios that would be considered by the partnership, but you could look at fast-track late 2013, 2014.”
Providence, which has the biggest stake in offshore Irish exploration licenses, will begin drilling an appraisal well next month at Barryroe off the southern coast. While it has enough funds for the exploration program, bringing oil ashore will require extra cash, O’Reilly said.
“We’d look to access that capital from farm-downs and future partner investments,” he said. Providence has 23 interests in permits off Ireland, after winning more in a licensing round earlier this month.
The multi-well drilling program will include projects in six geological basins off Ireland from 2011 to 2013, Providence said in September. It has a 50 percent stake in the Barryroe license, with San Leon Energy Plc and Lansdowne Oil & Gas Plc holding the rest. No final development decision on the field has been made, O’Reilly said.
Providence dropped 4.9 percent to 1.95 euros in Dublin trading as of 3:13 p.m. local time, after climbing 12 percent yesterday, valuing the company at 97.1 million euros ($136.2 million). The stock traded at 172.25 pence in London.
Several of Providence’s Irish discoveries are “close to commerciality,” Andrew Whittock and Rob Mundy, analysts at Liberum Capital, said Oct. 18 after the company won further exploration licenses a day earlier. Its development potential is being “overlooked” by investors, according to Liberum, which recommends buying the stock and has a 650-pence target price.
“By flowing oil in offshore Ireland, which is our intention, we think that will lead to a complete reappraisal of offshore Ireland,” O’Reilly said. “The environment is right, pricing is right, the fiscal regime is attractive, and the technology is in place.”
Brent crude futures rose 2.9 percent to $112.06 a barrel at 3:14 p.m. in London. In New York, oil for December delivery climbed 3.3 percent to $93.15 a barrel. Yesterday, the contract declined the most since Sept. 30, losing $2.97 to $90.20.
Providence and its partners won four of 13 licenses in Ireland’s licensing round this month as the republic seeks to spur exploration. Spain’s Repsol YPF SA got a 40 percent stake in a permit to explore the Goban Spur Basin off southern Ireland in a partnership with Providence and Sosina Exploration Ltd.
“This isn’t an easy game; there a lots of risks associated with it, so obviously the more players, the more wells will be drilled,” O’Reilly said. “That hopefully will deliver commercial propositions which will benefit all.”