Exploration company Providence Resources has reported a pre-tax loss of €5.58m for the six months to the end of June as the cost of hurricanes and lower commodity prices hit the firm. It had reported pre-tax profits of €3.25m the same time last year.
Half yearly revenues fell to €10.5m from €11.2m due to lower production in the Gulf of Mexico after the hurricanes there and the lower oil and gas prices.
Providence said the cost of sales rose to €7.2m from €4.2m, reflecting a number of once-off items including additional costs related to the hurricanes and higher insurance excess.
Providence said the single biggest cost variance in the half year accounts was the big increase in financing costs from €1.8m to €5m. This was due to a full six months of financing costs for Triangle and the costs of a bond.
Key developments in the six months included the exercising of the option to buy a 40% interest in the Kinsale Head area assets from Petronas, the drilling of the Singleton SNX-10 development well offshore, the farm-out by ExxonMobil to ENI of a 40% increase in the Dunquin prospect and the deeming of AJE to be commercial in Nigeria.
Providence said it is now active in four areas - oil and gas production, asset appraisal and development, high impact exploration and gas storage. It added that each of these areas are growing.
'Despite the tough global economic environment, the results for the first half of 2009 demonstrate a range of successful activities across the company's broad portfolio,' commented CEO Tony O'Reilly.
He said the firm's plans for field enhancement at Singleton, combined with its activities in the Gulf of Mexico, give it confidence that will will achieve its production target of over 3,000 barrels of oil a day.
Mr O'Reilly described the recently announced Eirgas deal to acquire the Kinsale Head assets as 'transformational'. As well as substantially increasing its daily production rates, it allows Providence to enter the gas storage sector. This sector is seen as a major future growth area.
'We view the future with optimism and confidence. This is because our individual projects and our collective portfolio now exhibit a balanced risk profile ranging from production, storage and trading, through field appraisal and development to high impact exploration - all back by world class equity and financial partners,' he added.
