Irish exploration company Providence Resources has said the process of finding a farm–out partner for the Barryroe oil field off the coast of Cork is "nearing completion".
Providence chief executive Tony O’Reilly said the oil and gas firm was in advanced negotiations for the farm-out process, which involves bringing in a suitably qualified partner to advance the project from development to first oil.
Providence owns 80 per cent of the Barryroe project, alongside partner Lansdowne Oil & Gas, which has the other 20 per cent.
Speaking at the company’s AGM in Dublin today, Mr O’Reilly advised shareholders not to speculate about the Barryroe deal terms publicly on message boards, saying it “doesn’t do anyone any good”.
Providence chairman Brian Hillery told the AGM that the company had been frustrated by the length of time the farm-out process was taking.
“Deals are taking much longer to achieve in the current environment. It’s not a question of getting a deal, it’s getting the right deal. Rest assure the farm-out remains the main priority of the company,” he said.
The oil and gas explorer came under fire from one shareholder at the annual general meeting, who criticised the remuneration paid to directors in light of the company’s poor share performance.
In the past 12 months, Providence’s share price has fallen from £5.42 to below £1.17.
“In any other industry, if the share price fell by that much, heads would roll,” one share holder said.
He said directors’ remuneration should be linked to the share price performance, adding that Tony O’Reilly’s €450,000 + pay packet was “excessive” considering the only people feeling any pain was the shareholders.
“You’d don’t think an 80 per cent reduction in share price should lead to some reduction in remuneration?” he asked.
While the share price has fallen considerably in the last year, Mr O’Reilly said it can go up just as quick, pointing to the nine months between January and October 2012, when the share price soared 325 per cent from £2.06 to £6.90.
However, he admitted that Providence has had a “terrible year” with the share price, saying it was impacted by a number of factors including the lengthy Barryroe farm-out process, ongoing capital concerns and a poor performing exploration and production (E&P) sector on the London market.
Mr O’Reilly said the firm was “very encouraged” by the results from the post-well analysis of the Dunquin North exploration well which has, for the first time, demonstrated that significant oil generation and entrapment has occurred in the Porcupine Basin.
He said appraisal drilling by a third party operator on the onshore part of the Rathlin Basin is currently planned for the first quarter of 2015.
“Our shallow water, high potential, Kish Bank oil prospect, offshore Dublin, is technically drill-ready and we are continuing to pursue the required consents to proceed with operations on this exciting prospect,” he added.
Providence Resources said it has also discussed a phased development approach to its Dragon gas field with both UK and Irish regulators.
