Providence Resources Forum

Listen to the drivel these guys put out..........appreciate the very long wait frustration but everything they say is morbid and downbeat and purely speculative..........they may be proven correct but i still wouldn't listen to their nonsense.........i've yet to hear someone with their money a horse yelling about how it has no chance..........i think these guys possibly haven't invested at all

promising notes being sounded from your link sully100

Completion of Sale of Irish Assets Further to its announcement on 26 September 2013, the Company has completed the sale of Island Oil & Gas Limited (“Island Oil & Gas”) to Ardilaun Energy Limited (“Ardilaun”). Under the finalised terms of the transaction, Ardilaun has agreed to pay San Leon US$3 million in consideration for Island Oil & Gas. San Leon has already received US$1 million and the balance of US$2 million is now payable within 36 months. Ardilaun will issue San Leon shares equivalent to 15 per cent. of its enlarged issued share capital. San Leon will maintain a joint operating contractor status in the Island Oil & Gas licences. As previously announced, San Leon has retained its Net Profit Interest (NPI) in the Barryroe licence, located in the North Celtic Sea, offshore Ireland. A number of parties have expressed an interest in a financial transaction on the NPI, subject to the completion of a farm-out by the Operator of Barryroe, Providence Resources plc. San Leon is evaluating these expressions of interests. [link]

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Shadow, hopefully it's already been snapped up. But the current share price reflects the risk a deal won't be done. If a deal is done there's still a risk that the field never sees production or produces less than estimated..

JREwing, I like your comment & the potential but in the current global economy with investors & pension funds searching for a project why has this not been snapped up. Is there something that the big guns fear entering irish waters. Even Providence cant appear to sell this . There must be a major technical risk factor here .

Mmmm, agree with you and also your previous comment about current share price. Until we get a deal done, we have no guidance on which to value the current share price. All we are doing is speculating but I still think if a deal is done then we're talking hundreds of millions and if production reached then billions.

I liked Godots synopsis. To pin point an exact value at this stage is impossible. Company valuation is a subjective area - comes down an agreed starting metric followed by negotiation - only difference for us as listed shareholders is the negotiation is done via the bid/offer acceptances and rejections

Godot, you're looking at assigning a long term production value to the share. My sights are set more on short term. In any case your figures are too conservative. Total production in your scenario is only 146m barrels. The NSAI estimate including gas was 346m. Also €5 per barrel is too low. If we take average price of oil over life of field at €80 per barrel and lifting cost at €15, then margin would be €65 per barrel. The total margin over life of field would be €19 billion. Take out development, maintenance and end of life cleanup of €1.75 billion leaves €17.25 billion to be shared amongst whoever the partners are. As I am totally unfamiliar with oil industry cost structure, please take the above with a pinch of salt. But given that Barryroe is expected to generate 4.5 billion for the Irish government, the above seems credible. That is why I say Barryroe is worth hundreds of millions now as there is risk in developing it, but potentially billions down the line. Would welcome any feedback on this.

To give you an idea of possible future value. If there was a profit of 5 dollars a barrel. 20,000 Barrels a day * 365 days = 36.5m a year. If the cost of capital was 15% then the value of this amount of profit every year for 20 years would be 3,739m. Divide by 1.2 to bring to euro= 3,115m.. If PVR have a 20% share of this then that would be 623m. or 9.59 a share.