Providence Resources, the oil and gas company that last week announced a "significant" oil discovery off the Wexford coast, has said its daily production will increase six-fold this year following the completion of its takeover of the whole of the Singleton oil field in the UK and increased production in the Gulf of Mexico.

In a statement to the stock exchange yesterday, Providence said it had exchanged contracts with Star Energy Group for the purchase of Star's 79.125 per cent interest in the Singleton field.

The $22 million (€15.4 million) deal, which was first announced in April and also includes the development of gas storage sites at Singleton and in Ireland, brings Providence's interest in the field to 99.125 per cent and as a result increases its share of production from the site from 120 barrels of oil equivalent per day (boepd) to 600 boepd. At $60 a barrel, Providence estimates this will generate about €6 million in net cash flow for the group.

When added to the previously announced production increases in the Gulf of Mexico, total production this year should be 720 boepd, the company said.

Providence chief executive Tony O'Reilly jnr welcomed the conclusion of what he described as a "significant" deal, particularly as it came so soon after announcing the Hook Head discovery. "This year we have gone from a company with relatively marginal production to one with a production profile that can generate meaningful cash flow."

Its shares fell 1.8 per cent yesterday to 11 cent in a weak market.