Providence have the cash to get to June 2016. By then they should have approx. 13m in cash. This would leave them 7m in debt. This can be rolled over and finally belts tightened. Oil markets will have turned by then. Shale will have been damaged sufficiently by then. Saudi-Russia etc will impose thereafter a cub in production. 1% will do the job and will accommodate for Iranian Oil. The real issue is not about over supply it is about market share. The smaller shale companies will go to the wall and the bigger Oil companies will take their assets and ensure that over production is curbed as it is in no ones interest. Just remember nothing has changed at Barryroe. In fact Providence has just added potential reserves and Spanish Point is a discovery. It is always depressing to see share price fall. However it is completely wrong to believe that the big institutions are bailing out. They are not. All holding their shares. Barryroe will be farmed out and things will turn. It would be nice in the meantime to see TOR and the board act correctly and cut their salaries and reduce non-essential expenses. Kinsale Energy are crazy not to be looking at Barryroe - for its gas alone. Landsdowne will wait until year end for either a Farm out on Barryroe or will sell its stake. Landsdowne is totally under valued as well and it is just negative sentiment on Middleton which has contributed. PETRONAS may buy Landsdowne now and do a deal with Providence on Barryroe. Very little volume in Providence. Market makers just scooping up shares on negative sentiment. They drop the bid and people panic. So my advice is hold tight. The Oil Markets will turn. Also the EIA has more or less sated this fact albeit producing some very dubious figures which completely overstate the over supply in World Oil Markets. Oil is cyclical and there will be a spike ahead. The idea of shale efficiencies is nonsense. The shale companies with oil at $100 generated 250bn in Junk bond debt. How will they manage at $50. Hedges that they bough to guarantee a fair price for future production are almost gone. The Saudis are shorting paper oil markets to ensure no more hedging available. In October banks will reassess credit lines to the shale players. Deep sea/Canadian tar/Brazil etc all in same boat. Natural decline in conventional oil production also needs to be replaced 3-5%per year on.
Wrote An email to Providence expressing my profound disagreement of the use of company funds for the sponsorship of the Irish Sailing Team. Told them that it is Hard to believe or understand how such a thing could be done given the present state of the company and Its finances. Told then it Would be understandable if Providence were in a healthy position and producing Oil. Told them that it does not appear that we Have received any benefit from this sponsorship and that the Irish Sailing Team appear to have more fortune with Providence than the shareholders. Told them that it is hard to believe the Board is unaware of views such as mine which likely reflect the opinions of many shareholders. Told them that Providence will likely be back looking for funding unless Farmouts happen soon and that if belts are not tightened the shareholders will suffer more dillution or assets will have to be sold to meet obligations.
The Company Response: thank You for your email which will be forward to the Board
Good news with Landsdowne commencing drilling this morning and expected to take anywhere between 20 and 30 days. A good result here will be very good for Celtic Sea and by extension Providence. Landsdowne will be a take over target and whoever looks to buy landsdowne may take a grater share of Barryroe. Also we may get someone to take the drill now at middleton and use it for Barryroe. Surely Providence have spoken to the rig owners as well
With he Midleton well being drilled and expected to be drilled by end of August we now have a drill free beside Barryroe. It costs between 200000 and 3000000 a day to use the drill. If Barryroe were to be drilled and the correct testing done this would take perhaps 30 days. This is a cost of between 6 and 9 million. I cannot understand why Providence do not approach either Fastnet, PETRONAS, Cairn, Sequa, Drilling Rig Owner etc etc and do a deal. This is pittance for a drill. It makes no sense.
Totally agree with Hyponotoad1. There were 1650 rigs last year drilling in USA and now circa 630 rigs. The talk of increased efficiencies is clearly nonsense as fracking requires continuous drilling which requires continuing finance. To be true the cost of drilling the wells would want to have dropped 50% at least and the production would want to almost limitless. So as ETF hedges drop off and as the price of oil hovers at 50 dollars a barrel and as banks reassess their credit lines to these Fracking companies in October we are likely to see the real story. Also believe that like Hyponotoad1 someone is cooking the books. Believe that these Frackers along with their Wall Street Buddies have a lot of interest in telling porky pies to the market. Coupled with this we see very little being said about the natural decline rates in conventional oil fields of circa 5-6% per year. This means that even if OPEC keep their production at present record levels of 33M barrels of Oil added to USA 9.1m-9.5m we still have a decline rate per annum of circa 3m barrels of oil. Do not believe that with capex slashed we will be able to make up for these reductions given present price of oil. Also we hear about demand. Demand has more or less increased every year for the last 20 years. Even in recession it is rising. There are greater numbers of people requiring energy. This year deman up over 1M barrels per day and next year anywhere from 1.1m to 1.6m according to EIA estimates. Thus who will provide this OIL. Falling production from Frackers. declining Nigeria. decling Libia. Struggling Russia. Iran produces approx. 2.6M Barrels in Total. It exports in black market about 1m. It says it could increase total production within a year of sanctions being lifted to 3.6m barrels. This is dubious. But even if true would not make up for the extra oil demand let alone the Oil declines we are likely to see from Natural Production decline and falling Shale, Canadian tar, Gulf of mexico etc.. Also Iran will require billions to develop its fields. Who will provide this money. With the threat of sanctions being reimposed should Iran not be seen to be complying with the Nuclear Accord who would take the risk of a major investment. Also what are the conditions for companies that invest in Iran i.e taxes etc. If they are similar to those offered by Gulf states then they are not very rewarding
Just to highlight a previous point regarding negative comments from a particular person who holds no shares in Providence please see the response from Landsdowne CEO to a question yesterday at AGM regarding horizontal drilling.
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I asked about horizontal drilling,saying that there were a lot of complaints in various places online that one was not completed with the 2012 drill. The need for horizontal drilling is a red herring, (something basically perpetuated by Jimmy over on iii), and before the myth becomes real in peoples's consciousness, it is worth pointing out that Boldy said that not all companies neccessarily favour that approach in these shallow formations anyway, and although some might use that technique, others will prefer to put a few vertical holes down instead when it comes to production wells. Not an issue
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Hello Sharemate. My average is 1.4 euros. Believe the shares will well surpass this level. I also averaged down Landsdowne and Fastnet. If You are above 2.5 Euros I would average down. The shares are cheap. It all depends on a deal. If one is done I am convinced the SP will rise strongly
Hello there Mmmmm. Point taken. However it is very strange that someone with no shares spends so much time bad mouthing the company. I am not saying things are great or that things might not have been done in a better fashion. However it is strange to say the least that so much effort is made by a Person with no shares. Have you seen the length of his comments. Do they look like yours or mine ??????. Given the low free float, the closed period for trading which makes it difficult for management to comment or buy shares, rumours and opinions can have a big effect I believe. There are many shorters working to depress share prices. I do believe that this at times is coordinated. In the case of Jimmy it would be interesting to know hwy he spends so much time and effort writing about Providence. My time and effort is because the share price is below where I bought the shares and I believe the situation will turn and I believe that we have good assets and possibilities. Someone who has no shares and just bad mouths a company, its strategy and management does not seem on the face of it to have an easily explainable interest
Everybody´s opinion is valid. However it is strange that someone with no shares spends so much time damming Providence. Wish Jimmy would explain why he spends so much time bad mouthing Providence. I can see two reasons why someone with no shares spends so much time doing this. 1. Either they are shorting the shares or else they have a vested interest or a party for who they are working/connected has an interest in keeping the share price low. Remember that if Providence needs to equity finance in the next year with SP down low it is more costly and unpalatable in terms of dilution. Any vulture company can try and depress the share price with a few bloggers knowing betting on the need that Providence could have in the future for equity finance. This company could come along then at the time and make a low ball park offer for the company. I remember one of the members of this board some time back had a link to an article discussing how the major oilers keep the minnows under their thumbs with this sort of behavior.