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The share price of Providence Resources has risen by 39.00 pence since the beginning of this month. That’s a a growth of 6.0% since the first of the year, as it closed today at 658.00. One year ago today the price was 279.00 establishing a 12 month gain of 379.00, an increase of 135%.
Expect to see increased interest in Providence after its announcement this morning that it has discovered a potential site that could yield as much as 530 million barrels of oil. As a matter of fact its value rose 2% today today to hit the 658.00 mark.
The find is located in the Rathlin Basin which separates Antrim from Rathlin Island. The research indicates that the field covers some 30 square kilometers. Dubbed the “Polaris Project,” the field is so close to the Irish coast and in such relatively shallow water that Providence is considering the possibility of drilling from onshore.
The site was located using advanced Full Tensor Gradiometry (FTG). FTG measures the density of the subsurface and the spatial rate of change of gravitational acceleration. It is highly likely that, using traditional methods, Bell Geospace, Providence’s contractor, could not have discovered the presence of the oil.
Technical Director of Providence, John O’Sullivan, explained that, “We continue to be very encouraged by the results. The Rathlin Basin has always been considered prospective due to the presence of a rich oil prone source rock, however poor seismic imaging has historically rendered it difficult to determine the basin’s true hydrocarbon entrapment potential. “
He also spoke to the beginning of the actual project, saying, “We have now commenced planning for a future drilling programme in 2014, which includes necessary site investigations, local permitting requirements together with regulatory and local stakeholder liaison.”
The Polaris Project is only one component of Providence’s plan for expansion of its multi-basin exploration and drilling ventures. That plan began in 2012 with the successful appraisal of the Barryroe project. During the current year, the company expects to commence drilling operations in three separate locations. The first is a deep-water site exploration will at the company’s Dunquin project off the western tip of the Dingle Peninsula. Secondly the company plans an exploration well in the Kish Bank about 11 kilometres off the shore of Dublin. Finally, but not necessarily in sequence of their plan, Providence will be working an appraisal well at their Spanish Point gas condensate discovery.
No doubt that Providence’s explorations off the coast of Ireland has been stimulated, at least in part, by lower tax rates on energy produced compared to production in the North Sea. With an 80% tax rate in the North Sea and a 20% rate off the Irish coast, that is a compelling reason to explore there, even if nothing was discovered.
