Providence Resources is shaping up to have a good deal of positive newsflow in 2009. The company strategy is a portfolio approach, holding a variety of diversified business interests in various geo-politically safe venues. On the one hand this creates a very stable platform for the company to build it’s plans, but on the other - it does give investors more of a headache in valuing the company. But such is our lot.... so let’s take a look.
Providence Resources (PVR) is an Irish company with 28 years operating history run by the wiley O’Reilly family who hold 35% stake. A charismatic man, the CEO Tony O’Reilly spoke recently at the First Energy Conference [1] in London with great enthusiasm about his development pipeline, tier-1 farm-in partners and the great potential for his offshore gas storage facilities in the Irish Sea. It’s a credit to the assets Providence holds that they have attracted such partners as ENI, Exxon Mobil and Chevron across their global development pipeline.
The company is the largest offshore acreage holder around Ireland, owning the only producing gas complex in those seas with significant exploration and development plans across it’s interests. It also holds production assets in the UK & Gulf of Mexico and holds some opportunistic fields in West Africa. Providence holds total P2 reserves of 8.5MMboe of oil and P2 gas of 17.4MMBOE.
A stable production base....
With 4000boepd production across UK and Gulf of Mexico Providence is able to finance much of it’s development with cashflow. Singleton, a UK onshore field just north of Chichester in which PVR has a 99% interest is a company cash machine - producing 700boepd with plans to double it to 1500boepd by bringing in standard US style onshore production processes. They are currently trying to secure a rig for a new production well in 2010 to tap further into the proven 4.6mmb oil + 1.6BCF gas at the location.
With a 40% interest acquired in 2008, PVR has a portfolio of 8 producing fields and a number of exploration assets offshore Gulf of Mexico. Net production to PVR is 1600boepd across assets with a proven 23.2BCF gas and 1.7mmb oil. The assets were hit in late 2008 by Hurricanes Ike and Gustav with 15% production…
