Providence Resources set to save €2.3m in legal costs
Earlier this year, the Tony O’Reilly Jr-led explorer raised $70m, via a company-saving share sale, helping it to pay off all debt, including nearly $7m it was ordered to pay Transocean from a dispute at its Barryroe field in the Celtic Sea.
It was announced yesterday that London’s Commercial Court has ruled that the Irish firm will not have to pay as much additional legal costs as previously thought.
The case had involved substantial legal costs and interest and Providence had set aside around $3.9m to cover its share.
However, that gross figure is now likely to be closer to $1.35m, potentially giving Providence more finanical security ahead of its planned drilling round at its west of Ireland offshore licences next summer.
Although Transocean can still appeal the legal cost ruling, Providence is viewing the Commercial Court ruling as a strong judgment and it provided a 2% boost to its share price yesterday.
“While offshore drilling costs are extraordinarily low at the moment, the savings on legal costs is still very welcome,” noted Davy Stockbrokers’ resources analyst Job Langbroek, who said the saved money can go to creating shareholder value.
Mr O’Reilly said the ruling was “a very positive result” and one which justified the company’s legal defence.
“With this matter now behind us, our focus remains on unlocking the value within our extensive asset portfolio offshore Ireland, with a particular emphasis on the farm-out process for Barryroe and Spanish Point, as well as completing our preparations for the drilling of Druid next June,” he added.
The ruling is also good news for Lansdowne Oil and Gas, which as a 20% junior partner at Barryroe, is also liable for a share of the litigation costs.
