Providence Resources Share Discussion Threads

[jack jebb] 23/11/2016 18:16

Made progress?

[zhockey] 23/11/2016 18:00

Richie, I think you want the guy to work miracles, what more could another CEO have done?

[richie666] 23/11/2016 17:53

“this year into next year” - already backtracking on the infamous Malcy blog comment re being done THIS year. He makes us a complete and utter laughing stock and should be shown the gallows forthwith.

[zhockey] 23/11/2016 17:52

I think the CEO deserves a break, he got an Exxon carry that made the company, unfortunately that was a duster but they acquired an enviable portfolio. Discovered 300m c2 at Barryroe and saved the company from going bust with a massive placing.

I see a lot of parallels with the GKP CEO prior to the 10p to 400p move.

[steelwatch] 23/11/2016 17:36

herm - speaking of deliveries, did you get yours?

[hermana3] 23/11/2016 17:28

Definitely not a crook but is he a delivery man?

[funtimejonny] 23/11/2016 17:03

Dam fine fellow TOR. Totally trustworthy.

[the fat controller] 23/11/2016 16:43

cgod,
Thanks for posting.
It tells us nothing specific, but gives confidence that TOR is not a crook, and that potential is massive.
TFC

[jack jebb] 23/11/2016 16:27

Watch this space? He's aving a laugh.

[cgod] 23/11/2016 15:38

Any day then..........

As Providence Resources steps-up Barryroe talks … will it be a Merry Christmas or Happy New Year?

23 Nov 2016

The run up to Christmas is steeped in wishful thinking and goodwill. These are things that Providence Resources PLC (LON:PVR) chief executive Tony O’Reilly isn’t short of at the moment.

Providence was able to restructure its balance sheet in June with a US$70mln placing backed by City institutions.

That funding lifted Providence out of financial peril, put it back on track and has left the group with what O’Reilly boasts is “one of the best” shareholder registers of any of his AIM quoted peers.

For three frustrating years the narrative from Providence Resource and O’Reilly has been consistent and a bit repetitive: the Irish company is encouraged by its ongoing farm-out process for the Barryroe oil field, and a deal is coming.

The ‘encouraging’ story has been told before. And at 10.75p today, versus nearly 700p back in 2012, the Providence Resources share price tells its own tale.

But at a City event recently, O’Reilly provided a rare insight into what’s been happening. He explained why he has been genuinely encouraged by negotiations, and gave the reasons he believes a deal is taking so long to get done.

Significantly, he believes the summer’s funding deal has brought potential partners back to back to the negotiating table.

“Essentially counterparties were waiting for us to go bust so they could deal with the administrator but thanks to our shareholders that obviously didn’t happen,” O’Reilly said.

“Barryroe is our main asset and I’m happy to say we have a number of companies in our farm-out process – some who have re-engaged with us since we completed our recent restructuring this summer.”

O’Reilly went further, explaining just how close Providence came to sealing a deal last year.

“We have gotten a lot of criticism in the past in regards the length of our Barryroe farm-out process, which has now been going on for three years. And yet it is widely known in the City that we’ve got deals done only to have those deals fall over because of the counterparty having issues raising capital,” he said.

“We actually had one, signed deal in 2015. The deal was actually signed into escrow, subject to them completing on the financing side and that didn’t happen.”

O’Reilly added: “Some have suggested we may have over-promised and over-hyped when we’ve said we had optimism about getting things done.

“We’ve had significant reasons to do so, because we actually had deals done but unfortunately counterparties pulling out, you can’t legislate against that sort of scenario happening.”

Whilst O’Reilly maintains that “an astoundingly difficult market” for oil companies was the root of the protracted negotiations, he acknowledges that some investors have been left to speculate that there had been Barryroe-specific stumbling blocks.

Nonetheless, he says that the asset is technically strong and argues that, at project level, there has been nothing to worry about.

“The delay has had some query whether there are technical issues with Barryroe, such as faulting or waxy crude, and is this impacting the farm-out process,” he said.

“Well, each potential farminee that we’ve been dealing with takes their own view on risks, so there’s no blanket response. But we are confident on the technical attributes of Barryroe.”

He highlighted that Barryroe’s crude is light, sweet, has high value but concedes it is also waxy, which presents a minor difficulty in the lifting of the oil.

That being said, O’Reilly points to the 2012 as proof that the waxy crude can be dealt with.

“While chemical additives can assist with the management of waxy crude, the primary solution for wax management is heat management which we successfully demonstrated when we flow tested in 2012,” he said.

He added that a planned but undrilled sidetrack (supposed to take place immediately after the 2012 well) could’ve shed more light on the surrounding geology. However, desktop analysis since then has provided de-risking insights as far as faulting is concerned.

“We’ve subsequently gone back and done a lot more analysis on the field and what it is showing is – which really does address some of the concerns the market may have about compartmentalisation – that there isn’t a great deal of compartmentalisation on the field,” O’Reilly said.

There’s not a lot of faulting, he confirmed.

“There’s a perception that there is a lot of faulting, because there was a field above called Seven Heads which did have faulting,” the Providence boss went on.

“But as you can see, as you get further down there isn’t that level of faulting in the main basal Weald sand reservoir and that’s the focus where we’re targeting an initial 90mln barrel recoverable field development.”

New drilling, post farm-out, in an area acquired last year from Petronas is designed to back up this assertion and, if successful, will add a great number more barrels to the proposed field development at Barryroe.

Barryroe is currently estimated to host between 89 and 624 million barrels of recoverable crude, with the ‘2C’ contingent resources seen at 346mln barrels.

That marks Barryroe as Ireland’s most significant - and potentially its first commercial - oil project to date, albeit very large untested exploration prospects are seen off the West coast.

A vertical well drilled and tested in 2012 flowed more than 3,500 barrels of oil per day which was better than the company’s expectations and bode very well for the envisaged field development – which would comprise horizontal wells starting at 30,000 bopd and capable of peak rates of 100,000 bopd.

O’Reilly said Providence is hoping to get the deal done “this year into next year” with the drilling at Barryroe potentially following in 2017 so that the project can advance to the final investment decision status.

“We are pleased with the companies that are in the process right now, as I say they’ve reengaged, doesn’t mean the deal is in the bag yet, which is what the market is waiting for,” he said.



“All I’d say is watch this space. We’re actively working with a number of companies to get a deal concluded as soon as possible.”

[hermana3] 23/11/2016 13:47

ZH,Now that would be an unbelieveable result!!!!! Price targets for next 12 months are very hard to guess as who knows what is happening at Barryroe and Druid/Drombeg drills are in the lap of the gods too. Expect it to be higher than current levels for sure....

[zhockey] 23/11/2016 13:15

If they hit 5Bl barrels at Druid/Dromberg then what will fair value be? £10?

[stockriser] 23/11/2016 13:11

40p is mine - but I do think it will go higher, possibly a lot higher. However, I have learnt a few lessons lately, and I'm certainly more risk averse, which is why I'm invested in PVR who have a load of cash, no debt, and some world class assets, in an area which is geographically safe ;-)

[zhockey] 23/11/2016 12:50

Herm, what is your price target here in 12 months?

[hermana3] 23/11/2016 09:43

COPL/Exxon have a massive target. Good luck to them.

[effiert] 23/11/2016 09:17

You guys ought to look at the last few posts at COPL. Spudding soon and could have an extra 2 free drills carried by EXXON. COPL already have two free drills in the pipeline one of which is spudding in the next week... game changer!

[funtimejonny] 23/11/2016 08:53

Thanks for posting that ohisay. I noticed elsewhere in the presentation that it says Barryroe. ..target farmout/appraisal drilling 2017. So won't be holding my breath for any news in 2016!

[zhockey] 23/11/2016 08:34

So if they have $40m cash then the enterprise value is about £35m covering all their assets? Is that not insanely cheap or am I missing something?

[hermana3] 23/11/2016 08:30

Some big buyers this week so may be something happening at HQ!

[cgod] 23/11/2016 07:45

Our day will come soon, keep hold of you shares as they will be hard to get hold of.

[ohisay] 23/11/2016 05:38

Did anyone else post it?




Barryroe /aka Blarneyroe.

Forward Plans
•Target farm out/drilling – estimated well cost c. $20 million
•Focus on First Phase Production System (FPPS) on eastern portion of SEL 1/11 and part of OPL1 Option - FPPS Target REC – c. 90 MMBO
•F&D of c. $10/BBL
•Breakeven costs (undiscounted) of c.$25/BBL

One of these days Rodney..yawn.

[abudhabi123] 23/11/2016 05:00

Richie...I too am intrigued why you do not share with us the response you have received from the Chairman.

[richie666] 22/11/2016 18:49

I have filtered AbuDhabi aka Anovas but I note his comment on the iii Board inferring "information" of a negative vein re me/Align. Abu - I have taken you off filter for the purposes of you putting this "info" to me. I am intrigued...