Tony O'Reilly Jr: heads firm

The exploration company Providence Resources has been given a Buy rating by the specialist broker Cenkos, which described its exploration assets as having "significant upside potential''. The small and mid-cap broker also said the business increasingly had a "utility-type business'' in its gas-storage subsidiary Eirgas.

Investors in Ireland and the UK have been buying shares in the company on the basis it could be the next Tullow, and the stock has risen hugely since February. Cenkos noted the changes in the business made over recent years. "With the addition of gas storage, the company has now added a significant area of diversification with what could be viewed as a utility-type play,'' said the note.

The company currently works with a number of major global oil and gas exploration companies, including ExxonMobil, Chevron, ENI, BP and Petronas. "The key to future growth is to continue to de-risk assets going forward while growing production to meet its funding requirements,'' said the London-based broker.

The company is led by Tony O'Reilly Jr and is actively pursuing a number of exploration opportunities off the coast of Ireland, including the Dunquin field and another target at Spanish Point, off the coast of Clare. The key shareholders are the O'Reilly family, Artemis Investment Management and JP Morgan.