Providence Resources Plc (PRP), an Irish oil and gas explorer, climbed to a 2 1/2-year high in Dublin trading after results from its Barryroe well beat expectations.
Providence rose as much as 20 percent to 6.20 euros, the highest intraday price since August 2009, after reporting flows from the well off southern Ireland. The stock traded at 5.85 euros as of 1:27 p.m. local time.
“We had certain expectations and this well far exceeded those expectations in terms of the quality of the oil, the thickness of the sands and the lateral extent of the resources,” Chief Executive Officer Tony O’Reilly said today by telephone. “It hopefully puts Ireland firmly back on the map in terms of a destination of oil exploration activities.”
The find is the first potentially commercial oil discovery off Ireland, according to Providence, which has the biggest share of permits in the region. The Dublin-based company won additional Irish exploration licenses last year with overseas partners including Repsol YPF SA, Spain’s largest oil producer.
The Barryroe well tested at a stabilized flow rate of 3,513 barrels of oil a day, almost double its commercial threshold, Providence said in a statement. John O’Sullivan, the company’s technical director, said the well may pump oil at “multiples of that kind” once development begins.
Price Target Raised
Providence also trades in London (PVR), where it rose 12 percent to 481 pence. Numis Securities Ltd. raised its price estimate on the stock to 637 pence from 460 pence after upgrading Barryroe’s recoverable resource estimate and increasing the chance of commercial success at the find to 80 percent from 50 percent.
The data from the well “certainly moves us towards the development task” and bodes well for the company’s other potential resources in the Celtic Sea, O’Reilly said. Once testing is complete and the development approved, oil may be brought ashore within two years, he said.
The data represent the first “significant” test flows of oil off Ireland in 12 years, Fergus O’Dowd, a junior minister in Ireland’s Energy Ministry, said in a statement.
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