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Thanks Manyana, 200mi ! Nice..
Two things together.
The reason why Barryroe was put into Exola as a wholly owned company by Providence was so the company could sell Barryroe just by selling Exola as it could be sold as a single entity. For example, if CNOOC came in to buy it all they have to do is buy the 100% Exola shares. Simple.
As for debts, look at the raises. raised €100m selling 13.1m shares in 2012. Also sold Singleton to Igas for £41m, say $50m but Singleton sale can't be reclaimed against Barryroe because it was English but it did pay off all of Providence's debts at the time so all subsequent debts are against Barryroe.
2015, it raised $25.5m issuing 66.8m shares at 25p a share.
Then you had the asset raise to pay of Transocean and fund Druid/Drombeg which came to $68.4m and was issued to institutions at 1:4.4 shares .
So, I reckon excluding Singleton which cannot be offset against Barryroe but was used to pay down debt you have a figure somewhere in the order of $200m with Dunquin North being probably the most expensive even though ExxonMobil was the lead but oil was expensive at the time and hence exploration costs were very high.
So $200m profit is a fair estimate of what Providence can generate after production cost before they pay any tax.
It seems Corrib is running into a bit of trouble and it is reducing output.
https://www.irishtimes.com/business/energy-and-resources/sales-at-corrib-gas-field-drop-as-gas-output-declines-1.3991037
So what happens to Irish gas which comes from Moffat when Boris takes the UK out of the EU with a no deal? Surely that is an opportunity for the gas that lies under Barryroe but we hear nothing about it.
Surely the Corrib issue must be a plus for the gas in Barryroe but we hear nothing about it and with O'Sullivan gone we will now, I presume, depend on McCoss as our technical wizard.
So final guesstimate: $200m already wasted so could be recouped from profits before tax is paid and with an oil price of say $60 and a production estimate of
Manyana would Barryroe by being placed in into a subsidiary company, Exola, not mean that it is ring fenced from other aspects of PVR's exploration activities in relation to tax issues?
Manyana
Very good post. Can you estimate what that total tax write off for all of PVR’s drilling expenses might be? Maybe there is gold at the end of the rainbow!
Your figure of €25.9m is far from the mark.
Yes for Barryroe you can use a figure of that but it only relates to Barryroe at book value. But what about all the other money Providence has spent on exploring Dunquin North, Druid/Drombeg, Spanish Point, Hook Head. etc over the years? What about all the money they spent on those duds?
Well, they are entitled to recoup all those costs before they pay a penny tax on any profits made from Barryroe or any other find. That is why Brid Smith has her head up her rear end if she thinks the government can just cut off all exploration at nil cost because of commitments made by the Irish Government back then which allows them to recover all costs to date as long as it is within a twenty-five year period.
It all happened in 1987, when a previous minister, Ray Burke (member of good old Bertie Ahern's Fine Fail), made a deal with the oil exploration companies, of which Providence was one, that if they found a commercial find they could recoup their development costs of any project on any exploration in Irish waters carried out over a 25 year period.
That is why, I believe, Providence has been running around like a headless chicken over the last years drilling, surveying etc. before it develops Barryroe because all costs sustained in those futile explorations will be recouped from the profits from Barryroe on any development in a twenty-five year period.
That is why a miserly $10m with another $15m to follow is chicken feed in the bigger picture of things.
Thanks Mark
€25.9m - Page 47 of 2019 annual report
Good few buyers about compared to sellers!
Its probably a stupid question but does anyone know a round about figure of what PVR can earn before having to pay tax on revenue due to their sunk costs of exploration? Its probably in as a note in the financial statements somewhwre, in terms of shareholder/company value i was just wondering where and how is that captured?