I havent written on providence for some time, the whole Barryroe saga was getting me down and it still is, the last deal fell through and those of us who worked out who it was were able to see at close hand that the moolah wasnt on its way to Dublin. Apparently it still is in negotiation and any delay is only on ‘capital availability’, join the club boys. On the conference call the mood was upbeat but then when was it ever not, Provvies is in ‘invest’ mode apparently and valued at only 9 cents in the barrel in the books, with an unparalleled portfolio and the latest licensing round showing incredible interest from oil companies large and small from all over the globe. PR are still talking to Melody finance and maybe others about extending terms and the maturity of their debt facilities which need to be tucked up before long. There is little doubt that Providence is on the list of highly leveraged exploration stocks standing at a massive discount to its potential NAV, but the market is in no mood to give companies the benefit of the doubt at the moment and proof of the pudding is in the eating, starting with Barryroe the company needs actions not words to get the share price moving.
Here is what Malcy has to say about Providence today:
This is what Malcy has to say about Providence today:
I think you are right Spuddy. It will be interesting to see what happens to this share if the price of crude goes up. I think this share will go up, as well as people's perception of the share. There is a good bit of time ontill the board have to pay back any money, so let's hope for a turnaround in the oil market in the meanwhile. It is a terrible thing to say , but one of the options the board have is to farm out Barryroe at a knock down price and move onto the rest of the portfolio. If there is interest in the data room, that means that someone will buy it at some price.
Sorry that should be The International Energy agency that are saying that production from non Opec Countries will decline at the steepest rate in twenty years.
I see Goldman Sachs are saying that oil will remain lower for longer, based partial on storage being full. That is one of the interesting things about the US, The refiners create a bottle neck due to having a small number of refiners. So it is not that hard to fill storage. On the other side of the coin The Energy Information Agency are saying that the US will have a lower production of crude at nine million barrels and The Energy Information Agency are saying that production from non Opec Countries will decline at the steepest rate in twenty years. So it is hard to see Forty dollars a barrel next year like Goldman are saying. They did call oil at two hundred dollars a barrel a number of years ago, so I would think maybe they are talking the price down for their own purposes. Nothing wrong with that to be honest. That's their job.
Could be that the share price that they mentioned is the price that is listed on the Irish Stock Exchange, which is a price of twenty two cent.
DAVY VIEWThe weekend news that Eni made a world-class gas discovery in the Egyptian offshore is a welcome development for the hard-pressed E&P sector. It is particularly good news for Petroceltic, which has a 50% share in the immediate block to the east.