"The Government have clearly sent the message to Shell, ‘you can do whatever you want’. Fortunately due to protest, the refinery remains unconnected to the gas field. If, as Shell planned, gas had been flowing by now, we would potentially all be dealing with a gas leak and explosion.”
Fresh estimates concerning how much oil exists at the Barryroe field, off the Cork coast, have hinted at around one billion barrels, three times higher than previous expectations.
In a new research report on Providence Resources, which currently controls 80% of Barryroe, London-based brokerage Liberum Capital said that it estimates the field could contain approximately one billion barrels of oil-in-place and more than 160 million barrels of recoverable oil.
"This appears to be treble current market expectations and points to significant share price upside," Liberum analysts Andrew Whittock and Rob Mundy said.
The recoverable oil figure would rise depending on how many wells are drilled in the field.
While Liberum’s figures are only latest estimates, a clearer picture on Barryroe should be visible by the end of this month. Results of an official oil-in-place study at the field should give a firm indication of exactly how much oil exists there.
Positive results from that study could also speed up Providence’s efforts to farm-out — possibly to one of the big Asian or North Sea players — a sizeable equity stake in Barryroe, in order to shield it from high development costs. The Irish company is looking to lower its stake in Barryroe to around 40%. Currently, fellow Irish explorer, Lansdowne Oil and Gas controls 20%.
In its latest coverage on Providence, Liberum said that it expects the end of July study to result in "significant upgrades to market expectations".
"We believe sufficient data has already been disclosed to enable broad estimates of stock tank oil initially in place to be made," the report added.
A spokesperson for Providence said that the favourable update by Liberum had been noted by the company. Beyond that, all they were prepared to say was "as previously advised, Providence will be providing an updated oil-in-place resource figure at the end of July".