LONDON (Alliance News) - Irish-focused oil and gas company Providence Resources PLC on Tuesday said its pretax loss widened in the first half due to financing costs and said it is initiating measures to cut its costs amid a tough operating environment.
Providence said its pretax loss in the first half to the end of June was EUR8.4 million, compare to EUR3.4 million a year earlier, primarily due to a sharp rise in finance costs related to its EUR25.8 million placing and open offer in March. The group does not generate any revenue.
Providence is working on progressing its portfolio of prospects in the Irish offshore sector, focused on the North Celtic Sea Basin and the Southern Porcupine Basin.
The company said it has started talks with Melody Finance LLC, its debt provider, about amending the terms on its current debt facilities given the challenges the group is facing from the tough environment in the oil and gas industry, where project economics have been hit hard by the declining oil price.
Providence has also initiated a review of its cost base in order to identify any other areas in which it can make savings and expects these to result in a 12% fall in general and administrative costs in 2015 year-on-year and a 20% fall in these costs in 2016 against 2014.
"Providence remains fully committed to offshore Ireland, an area with both exceptional prospectivity and internationally competitive cost and operating dynamics," said Chief Executive Tony O'Reilly.
Shares in Providence were down 4.3% to 13.40 pence on Tuesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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