Dumb it down
So what does the Providence Resources oil upgrade mean for the country?
Is there anyone in the world who doesn't love oil? Apart from seals, obviously. Today we're daydreaming about an economic recovery after Providence Resources upgraded their Irish oil estimates.
I don't know much about oil other than that it’s black and sticky. Tell me why I should be excited about Providence something or other.
We can do that. Back in mid-March Providence Resource struck oil after regular tests were carried out Barryroe oil well, which is just off the coast of Cork.
At the time, Providence's chief executive Tony O'Reilly Jr described the find as "just like winning the lottery". Barryroe became Ireland's first-ever commercial oil well and estimates were made that the test drill found an oil field that contained at least 373 million barrels of oil. The absolute highest estimate that anyone was veering towards was 893 million barrels.
That’s pretty impressive actually. So what changed this morning?
Well if the original find was described as Christmas, today’s revision of the discovery is the equivalent of Christmas if you’re the son of a Russian billionaire.
Rather than 373 million oil barrels, Providence made a statement to the Dublin and London Stock Exchange announcing that the oil field may be four times bigger than originally anticipated, with potentially 1.6 billion barrels worth of oil.
Oh my. What did Santa O’Reilly say in his statement today?
Here’s what our new hero had to say for himself: “We are delighted that more comprehensive studies of Barryroe confirm a resource base of between 1 billion and 1.6 billion barrels of oil in place, with further potential for incremental resource growth.
"This is a considerable increase from earlier estimates, which indicated 373 million barrels of oil."
Mr O'Reilly added that the oil was of better quality than expected and that Barryroe "is a substantial oil accumulation across multiple stacked horizons with much running room for further resource growth." We're not exactly sure what that means but it sounds positive.
So we’re rich again, right? Can we buy lunchtime paninis again like in the good old days?
Hold your panini horses, young man. Providence actually owns 80 per cent of the find, though The Department of Finance already levies a 25 per cent tax on any oil and gas revenues in Ireland. If we multiply the original estimates of the find by four, we could net at least over €100 billion.
To put that into perspective, we could then buy over 20 of the $4.8 billion-valued History Supreme yachts, which are gold-plated and have platinum sleeping quarters. Or we could spend the money on economic investment and boring stuff like that.
We could all share the yacht for one weekend a year or something like that?
Yeah, that could work. The news is huge for Providence, whose stock price jumped up 7 per cent in early trades this morning and has increased by 50 per cent from a month ago, when rumours of the revision began to spread.
The next step is to examine how much oil can be extracted economically and begin exploratory drilling in its Dalkey Island licence area for hopefully another lucky strike. in which case we could possibly think of hover technology-assisted History Supreme yachts. But let's not get carried away for now...
In the words of that horrendous Irish accent teacher on YouTube, I think I speak for all of us when I say: “I’ll be foine wid all dis oil”.
You took the horrendously accented words right out of our mouths.