Reading between the lines

The use of words as a weapon for subterfuge is as old as the discovery of writing itself. Without prejudice or judgment, I could not help observe a headline in an newspaper in April of 2013: ‘Petrel shares soar as it eyes major oil find of the west coast.’ The article, honestly written I had hoped by the writer John Mulligan, made me wary in itself, for eyeing oil as opposed to finding it is two very different things altogether. Further into the article, this view was strengthened when John wrote that Petrel reckons that its Quad licensing block could hold several hundred millions barrels of oil. That word 'could' just about stopped me pulling out my cheque book, and there might have been enough money in it too to be able to buy perhaps some over inflated shares. At least I reckoned so. The highlighted words are the cornerstone of his article below and worth reading between the lines.

Previous estimates by Petrel estimated that its Quad 35 could produce even more of the dark stuff, and I don’t mean Guinness, at over a billion barrels of oil. Petrel also stated that they have long believed that the Porcupine Basin is a hydro carbon province. At this point I started to get real nervous, wondering perhaps too loudly, that maybe this place is a breeding ground for just porcupines or another country. Mr Horgan, a serial entrepreneur and managing director of Petrel, was looking for partners even though he has one too many already, otherwise called shareholders, told me also that floating shares alone would not be enough to bring this baby home.

Even as far back as early Nov 2012, a similar article by this same newspaper saw Petrel shares jump from 6 pence a share to €18.75, a rise of 300%. But what goes up must come down, especially if all those expectations turn to be a little less than overly optimistic. 

By Sept 2013 the truth of the matter, the little there was leaking out, showed seepage of a worrying kind if you bought shares in this company. New words instead of oil were brought in by Petrel, and to help contain the damage, there went John Mulligan again who wrote then: "The last ten months, according to Teeling, chairman of Petrel and another serial entrepreneur, has seen rapid progress, and price appreciation. “ We now have momentum, and good partners in Ireland and Iraq and have plans to move forward.” These Irish and Iraq partners, are I presume, those once hopelessly optimistic shareholders. Despite having other strategic partners as well and while Telling continued to process data, Petrel shares and profits continued to fall. John Mulligan, bless his little heart, had a slight change of one. He reported in the last 2 lines of that still otherwise optimistic article, if you could even call it reporting, that Petrel made a pre- tax loss of €247,000 in the first six months of 2012, and that amount again in the same period for 2013. 

Oh, I almost forgot: their share price had fallen to €11.75 by the end of 2014 and continued to fall a lot more than the 6% fall claimed by mulligan. As of March 2017 Petrel shares were worth little more than €5.00 each.

All of this heady talk of shares, oil, and possible wealth, had me scratching my head. I digressed in thought while waiting to stop the itch and this one memory would not leave my mind. It was a departing alcoholic politician who was very fond of the black stuff, rather jowly in appearance, rather dour in the immediate circumstance that he found himself in, and was looking evenly at the media that had gathered around him, and used part of a sentence to explain the greatest financial meltdown this country of ours had ever faced or ever will face (I hope) and said this: “Based on the information we had at the time……………………………..”

Barry Clifford

This is John Mulligan’s article before the fall: Irish Independent 03 April 2013

‘Petrel shares soar as it eyes major oil find of the west coast.’

THERE may be hundreds of millions of barrels of oil untapped beneath a section of the Atlantic being probed by exploration minnow Petrel Resources, the company has claimed.

The firm, chaired by serial entrepreneur John Teeling, says that it has completed initial survey work on its two licensing options in the Porcupine Basin, 200km off the west coast.

It reckons that its so-called Quad 45 licensing block could hold "several hundred million barrels" of oil.

It has previously estimated that Petrel's Quad 35 licensing area in the Porcupine Basin could contain more than one billion barrels of oil.

Such finds, if proven and commercially exploitable, would rank among the world's biggest oilfields.

Oil giant ExxonMobil has just commenced a $160m (€125m) test drilling programme in the Porcupine Basin at the so-called Dunquin prospect in which Irish firm Providence Resources has a 16pc stake.

Petrel's licensing areas are just 35km from the Dunquin area.

"We have long believed that the offshore Porcupine Basin is a hydrocarbon province," said Petrel managing director David Horgan.

"This has been further supported by our recent work in identifying potential prospects on both of our blocks. The spudding of a well by Exxon Mobil in the nearby Dunquin prospect will add to the interest."

Mr Horgan said the company is now looking for potential partners to further advance its work on its own licence blocks in the area.

ExxonMobil will be drilling for up to 120 days off the west coast and is being supported by ships from the port of Cork. It's using a semi-submersible oil rig that it brought to Ireland from west Africa.

Previous data has suggested that there could be over 300 million barrels of oil and 8.5 trillion cubic feet of gas between the two Dunquin prospects.

That amount of gas would make a find about five times larger than the Kinsale field and about nine times bigger than Corrib.

New technology and sustained high oil prices have made the hunt for new reserves in deep water more commercially attractive in recent years.

The potential oil and gas reserves at Dunquin lie under about 3.6km of seabed at a water depth of 1.6km. At Petrel's licence areas, the water depths are between 700m and 1km.