Joe Brennan
Providence Resources, which won shareholder approval on Thursday for a $70 million (€63 million) rescue fundraising, said a number of “super major” oil groups are swarming around its Druid and Drombeg prospects 220 kilometers into the Atlantic Ocean.
“I think you can expect that anybody who’s got an interest offshore, off the west coast of Ireland, has got an interst in what we have,” Mr O’Reilly told reporters after an extraordinary shareholder meeting.
This year has seen industry giants such as ExxonMobil, Statoil, BP, Eni and China National Offshore Oil Corporation, or CNOOC, successfully bid for options to search for oil and gas off Ireland’s shores, following what the Government said was a record level of applications.
Providence's cash call was triggered after it was landed in April with most of a $7 million bill arising from a court battle with Transocean, an offshore drilling company which provided services for its Barryroe exploration site. The Irish company, which had only at $4 million of cast at the time, was also forced into talks with its main creditor, Melody Capital, which was owed more than $20 million. The New York-based firms loans are now being repaid.
Providence also sought funds to tide it over until it sells stake within the next year in Barryroe, which was found in 2012 to have more than 300 million barrels of recoverable oil A previous “farm-out agreement” for Barryroe fell through last year after the chosen partner, known to be London-based Sequa Petroleum, failed to raise the necessary funds to participate.
A number of parties are now in talks on a Barryroe deal, having waited during the company’s financial woes in recent months “to see how it would play out for Providence, or do a deal with an examiner or an administrator, said Mr O’Reilly.
Mr O’Reilly said he hopes to complete a transaction on this field this year. A slump in oil prices has resulted in the cost of drilling on this site falling by two-thirds in recent years to about $50 million, according to the company.
However, Mr O’Reilly said the company was “surprised” when it was on the road seeking rescue funds that investors were pressing him to raise additional equity for drilling on the Druid prospect, which the company claims has the potential to deliver 3.9 billion barrels of oil. The Drombeg field, stacked 1,000 meters below Druid, may yield a further 1.9 billion barrels, according to the company.
While the equity raise has given the company enough money to cover drilling costs for an explortion at Druid, it is also exploring a “farm-out” agreement on the asset, which has attracted some of the world’s main oil groups, it said.
Mr O’Reilly, who received €494,000 in pay last year, s aid he has take a 20 per cent salary cut this year, which will remain in place until a Barryroe transaction is completed.
