Twosheeps

PROVIDENCE RESOURCES (PVR LN £62.8m 10.5p Cenkos Brokership BUY) - We just had a call with CEO Tony O'Reilly following some weakness in the shares, the Exxon exit from the Dunquin licence and an activist investor piece positive on the assets but negative on management. The key points are - everything on track as outlined in prospectus: 1. Well management co to be appointed in next few weeks. 2. Rig tender result to be by end-Nov. If anything prices are looking lower than at the time of the fundraising. 3. Drilling window opens in May '17 for Druid/Drombeg. 4. Data rooms are very busy and do not reflect the usual summer slowdown in activity. 5. The '17 drilling programme is fully funded and not contingent on a deal - although the company is activeley seeking partners on the right terms. 6. Exxon Mobil's exit from the Dunquin licence was well known within the industry and had been underway for about 2 years. They were play specific on Dunquin and had no interest in Dunquin South when the seal at Dunquin proved breached. ENI remains fully committed. We have had some selling of the stock but there are no negative catalysts to drive this selling. We see any weakness as an opportunity to buy exciting assets at a very low valuation and look forward to news flow over the rest of the year. BUY.