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He also owns warrants, which, if exercised, would increase his Providence holding a little more towards near 3 per cent.
“This is a brilliant project for Ireland. It just needs to happen.”
Andrew MacKay
While MacKay believes in Barryroe, he admits there is still much to do. “It has a fair way to go. Alan Lynn has talked about three and a half years.”
“My experience is not just drilling, it is far greater than that. This is also a legislative, political and financial challenge. It has got everything in it. I am not an expert in it all but I am really looking forward to my input helping to show the way and really help Alan Lynn.”
MacKay said he was aware of the political context of exploration in Ireland. “Providence will do everything it can to reduce its environmental footprint,” he said. “This will reduce the amount of oil and gas that needs to be imported.”
“Building LNG plants and interconnectors is extremely expensive and arguably more CO2 damaging than doing it yourself,” he said. MacKay said Providence would generate significant sums for the Irish Exchequer which could be used to aid the transition to more green energy.
Lynn has said he expects the farm-out to develop Barryroe to be concluded by the end of October. The members of the consortium are expected to be announced shortly. Providence has an annual general meeting on July 20, leading to an expectation of more information. What does MacKay know about this?
“With a project of this scale, you have a consortium of X number of service companies to provide both drilling expertise and production expertise. It is a real challenge to get all of the participants to agree on everything.”
“SpotOn is the middle of these discussions. I am absolutely 100 per cent sure they are working towards this but we have to be a little patient.”
“From what I know of the consortium this method of doing things is a great way to bring in experts and let them do the design and exploration. I don’t know the exact end game but I do know we are working hard towards it.”
“This is right up there for me. I have followed this story for so long. I wouldn’t get involved in this if I didn’t think it had everything going for it – and not just for Providence but also Ireland.”
“This is a brilliant project for Ireland. It just needs to happen.”
P“Working with the government gave me an incredible insight into how things work from its perspective,” he said. MacKay then worked on wells project in the North Sea, which was undergoing a boom that has generated billions in taxes for Britain.
In 1988 he founded the NRG Group, and built the business from two clients to 60. In 2007, it expanded into drilling wells in Africa, before getting involved in Providence in the run up to the 2012 find. “We got involved with Providence when we were asked if we would drill their next well in Ireland. This was what became the Barryroe well,” he said.
MacKay remembers the excitement of the find as oil started to pump from its test drill.
“It came in at 4,000 barrels of oil a day equivalent. It signalled after all this time a real opportunity for Ireland to do something and develop the Barryroe field,” he said. “We were the people right at the front at the start. Unfortunately, then not a lot happened from 2012 on.”
MacKay said he did not wish to comment on the old management of Providence, or the company’s failure to progress things. “I think that is a rough question. I was in the parlance, a driller. Our job was to drill and test that well and see if it came up with trumps. I had no role afterwards. That was their business.”
“I know it has led to all change in 2020. Providence is a different kettle of fish today. We have a very experienced leader with Alan Lynn.” MacKay said his experience was in operations and the “nuts and bolts,” of exploration.
He said his experience working for the British government and with many different companies would also help. “My experience is not just confined to drilling wells but also legislative contracts and the billion things it takes to drill a well.”
MacKay said he had gone on the board of Providence because he believed in the company. “I have always followed what Providence was doing,” he said. “I was always convinced there was something there.”
In March 2018 he said he had invested in a placement in Lansdowne, which has a minority interest in Barryroe. “I am not a professional investor,” MacKay added, explaining that he invested only in things he understood.
After Alan Lynn was appointed chief executive of Providence, MacKay reached out to him. “I asked him could I be of any help as I had the history of Barryroe. I am incredibly enthusiastic about the whole of Barryroe.” When Providence raised fresh finance in April, MacKay put his money where his mouth was and participated.
“That was that. I met Alan and I had met Pat [Plunkett, the chair of Providence] in the months before. Pat asked me to join the board. I am now on the board. I am very enthusiastic about this business. It is a no-brainer.”
MacKay is backing Barryroe with his own money. He has his 1.7 per cent stake in Providence, and he has a 3.59 per cent stake in Landsdowne, whose sole asset is a 20 per cent stake in Barryroe.
It was a moment described by Tony O’Reilly Jr as a “seminal day for Ireland, especially in the runup to St Patrick’s Day”.
It was early March 2012, and Providence Resources had just told the stock market it had hit oil in Barryroe, off the coast of West Cork. “As the Americans say, ‘We didn’t hit a home run, we knocked the ball out of the park,’” O’Reilly Jr enthused. Providence said its results had “far exceeded pre-drill expectations with oil rates in excess of 3,500 barrels of oil per day.”
The field was estimated to potentially contain billions of dollars’ worth of oil. Providence’s share price surged on the back of the exciting news. It was, however, an announcement that would turn out to be most premature.
*****
Eight years later, Tony O’Reilly Jr is gone, replaced by Alan Lynn. A deal with a Chinese oil giant to extract the oil has collapsed ignominiously. After scrabbling together a few million from existing investors to keep going, Providence is in rebuild mode. It has brought in a tiny but experienced oil field development company to help it called SpotOn Energy, which is based in Britain but backed by Norwegians.
The next piece of the jigsaw was the arrival of Andrew MacKay as a non-executive director. MacKay is 69 years of age, and the founder of Aberdeen-based energy services company NRG Group. The NRG Group was founded in 1988 and has two divisions, NRG well examination and NRG well management, so it knows all ends of the exploring game.
The arrival of MacKay on the board of Providence brings serious experience to its team. He was working for Providence when oil gushed in Barryroe eight years ago, and his connections with exploration in Cork go back five decades. MacKay knows his stuff, and he is putting his own money on the line, acquiring a 1.7 per cent stake in Providence, as well as having an interest in Lansdowne, its minority partner in Barryroe.
He said his experience working for the British government and with many different companies would also help.
The Currency spoke to MacKay just days after his appointment to Providence. Due to Covid-19, he has not yet been able to physically sit down with his fellow board members, but he is excited about the prospects for Providence. He knows the area of the find intimately.
“My experience in the area goes back quite a long way,” he said. “It was November 1997 when I first moved to Ireland with Halliburton [a US oil field services company]. I was an engineering manager from November 1977 to November 1979. I was involved in Kinsale Head (a natural gas field discovered in 1973 which is only now almost depleted).”
MacKay worked on various exploration projects in the area learning about the practicalities of exploring there. “I fell in love with Cork and I married a girl from the Western Road in Cork,” he said.
MacKay later moved to work in the oil and gas trade in Saudi Arabia, before moving back to Britain where he worked for the government before setting up his own consultan
Apecs......typo
Specs typo
Blast from the past
Rns Mon 29th July 2019
And I quote
No funds received
However the company has been provided with a copy of further documentation provided to specs funders "the payee" by HSBC showing that us 10 million dollars has been debited from the payees account for payment to providences designated account . The documentation confirms that the payment date is still pending due to final processing by HSBC
Opinions welcome
Article on the currency today. Don’t have a sub so can’t read it.