Providence: Further delay agreed for Barryroe project loan (Ireland)

Providence and its subsidiary Exola are yet to be provided a loan by China’s APEC related to the farm-out of a stake in the offshore Ireland block containing the Barryroe project.

COSLInnovator; Source: Lundin

Providence’s subsidiary Exola and partners Lansdowne in 2018 agreed to farm-out a 50% working interest in SEL 1/11 license offshore Ireland, containing the Barryroe field, to a Chinese consortium led by APEC Energy Enterprise, a privately-owned Chinese company which has a strategic partnership with China Oilfield Services.

The Barryroe Partners then in September 2018 agreed on amendments to the farm-out agreement with a total of $24 million (previously US$ 19.5 million) allocated to fund the forward costs of Exola as the operator of the Barryroe project. The costs are associated with carrying out the well-site survey operations, consenting the drilling program and other project-related costs.

Of the $24 million, $9 million is to specifically cover the costs associated with front-end well-site survey operations and pre-drill well consenting.

It had been agreed that APEC would make a $9 million advance under the agreed loan, however, the advance was not received during Q4 2018 as originally expected.

However, given the delays with a Barryroe site survey program caused by legal action, the operator did not, in fact, require the funds by APEC at that time to finance the front-end well-site survey operations and pre-drill well consenting.

Related: Providence delays Barryroe survey and drilling following legal challenge (November 30, 2018)

Providence on June 5 said it had agreed to a revised backstop date for the receipt of the $9 million loan advance from APEC, with the date set for June 14.

This has now been extended further, with Providence on Monday saying that a further extension has been agreed for the receipt of the loan for the costs associated with front-end well-site survey operations and pre-drill well consenting.

Providence said: “Due to delays associated with internal transaction processing with their investors, APEC have formally requested a further extension of time for the payment of the initial $9 million loan. Exola and Lansdowne have agreed to this further extension of the backstop date to no later than July 5, 2019.”

Providence said that well site survey operations, subject to receipt of all regulatory consents and required financing, are expected to start Q3 2019. In its previous update, Providence said that drilling would start in the fourth quarter of 2019, instead of, as previously expected 3Q.

The partners in the project in February said that that COSL nominated its 6th generation “COSL Innovator” semi-submersible drilling unit for Barryroe drilling.

Providence’s map of licenses. Source: Providence
Providence’s map of licenses. Source: Providence

Offshore Energy Today Staff

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