Providence Resources P.l.c., the Irish-based Energy Company, today announces its unaudited interim results for the half year ended June 30, 2021.
Business Review
Governance
- James Menton was appointed as Senior Independent Non-Executive Director on 14 May 2021 as an initial step in adding to the quality and range of board competencies considered essential for shaping the future Providence Resources Plc business strategy.
- Pat Plunkett stepped down from the Board following the Annual General Meeting (AGM) on 22 July 2021 and James Menton assumed the role of Chair following the AGM.
- In line with the policy of strengthening the board, two new board members were identified and recruited to join Non-Executive Director Andrew MacKay who was appointed in July 2020. On 23 July 2021 Peter Newman was appointed as Senior Independent Non-Executive Director and Ann-Marie O’Sullivan was appointed as a Non-Executive Director.
Strategic review of development potential of Barryroe
A full strategic review of the development potential of the Barryroe field has been initiated by the new Board of Providence Resources Plc in order to prepare a robust case for the development of the field to optimise value for shareholders, while recognising the need for Irish energy security through the energy transition. Following termination of the farmout to SpotOn Energy, the strategic review, which will include independently evaluated assessments of the field’s development scenarios and their potential, is considered essential by the Board.
The results of this strategic review, encompassing both Providence’s Technical Strategy and it’s related Financial Strategy, will be completed in Q4 2021 and will determine the strategic plan for the development of the Barryroe Field.
Barryr oe, Celtic Sea (SEL 1/11) - Subject to Lease Undertaking application
The Group holds an 80% working interest in and is operator of SEL 1/11 which contains the Barryroe oil accumulation. The Barryroe Standard Exploration Licence period continued up until the 13 July 2021. Prior to its expiry, and having met all the conditions attaching to that Licence, the Group applied for the follow-on permit, being a Lease Undertaking, which is subject to government approval. Initial documentation for an application for a Lease Undertaking was submitted to the regulatory authority in April 2021 and was completed in July 2021, prior to the expiry of SEL 1/11 in July 2021. The regulatory authority requested additional information in support of the application, which was provided. The Lease Undertaking application remains under consideration by the regulatory authority.
The Directors note that the Irish Government has stated that existing authorisations can continue to apply to progress through the licensing stages. This position is consistent with the recent legislative amendments made to the Petroleum and Other Minerals Development Act 1960 through the Climate Action and Low Carbon Development (Amendment) Act 2021.
In February 2021, the farmout agreement with SpotOn Energy Limited was extended to provide SpotOn with additional time to finalise project development funding. In April 2021, following SpotOn’s failure to meet key financing conditions, the agreement was terminated.
Providence immediately reassumed direct responsibility for progressing the development and recruited an experienced Oil & Gas team to refresh and optimise a phased development plan for the Barryroe field, with Providence as operator. This new team’s technical evaluation is nearing completion and includes independent contributions from specialist sub-surface, facilities, and drilling consultants. The aim is to prepare a phased project development plan which is operationally and economically robust. The results of this work will be incorporated into the full strategic review of the development potential of the Barryroe field to be completed in Q4 2021.
In February 2021 Providence Resources Plc subsidiary (Exola DAC) received consent to carry out a site survey. The survey is scheduled for October 2021.
Other License Areas
Dragon, St. George’s Channel (SEL 1/07)
Under discussion with the regulatory authority.
Hook Head, North Celtic Sea (SEL 2/07)
Subject of a Lease Undertaking application.
Helvick/Dunmore Celtic Sea (Lease Undertaking)
Subject to work programme finalisation. Extension is under consideration by the regulatory authority.
Avalon – Southern Porcupine (FEL 2/19)
The relinquishment documentation is in process with the regulatory authority.
Dunquin – Southern Porcupine (FEL 3/04)
The relinquishment documentation is in process with the regulatory authority.
Finance
- Operating loss for the period was €1.065m versus €1.063m in the prior period.
- Profit before tax for the period was €1.628m, due to a non-cash accounting gain in relation to the warrants revaluation (€3.155m net revaluation gain) which exceeded operating and administrative costs incurred in the period. The loss for the equivalent period was €9.247m (€7.764m net revaluation loss).
- Basic/diluted profit per share of 0.18 cents and 0.14 cents versus loss in prior year of 1.30 cents for both basic and diluted.
- As at 30 June 2021, total cash and cash equivalents was €3.645m versus €2.269m at 30 June 2020.
- The Group had no debt as of 30 June 2021. (2020: Nil).
- During the period 86,061,529 warrants at £0.03 were exercised raising c. €2.9m. The remainder of the warrants expired on the 6 May 2021. The warrants were issued as part of the May 2020 fund-raising. 177,973,004 warrants with an exercise price of £0.09 remain exercisable until 6 May 2022.
- The total issued and voting share capital as of 30 June 2021 was 974,864,403 ordinary shares of €0.001 each.
- 4,500,000 share options were granted to both James Menton and Andrew Mackay on 24 May 2021.
- 4,500,000 share options were granted to both Peter Newman and Ann-Marie O’Sullivan on 18 August 2021.
Providence Resources Plc CEO , Alan Linn commented on the importance of the Barryroe development:
"It is widely recognised that gas will be an essential energy supply for decades to come, in order to underpin and complement the growth of renewable energy sources. With the decline of the Corrib Gas Field within a five-year period, we are focused on progressing our strategic plan for Barryroe as a matter of urgency. The successful development of Barryroe would secure an indigenous oil and gas supply for Ireland, without which 100% of Ireland's gas will be imported by 2031. At a time when much of Europe is experiencing difficulties with energy supply, a coherent transition strategy is critical to avoid the prospect of energy blackouts becoming a common occurrence.”
