Providence further extends deadline for Barryroe loan

The Irish oil and gas operator Providence has extended a deadline for the receipt of a loan by China’s APEC, despite saying last week there would be no more extensions.

Providence, which operates the Barryroe offshore prospect in the North Celtic Sea Basin via subsidiary EXOLA, last week said that the Barryroe farm-out-related $10-million-dollar loan from APEC hadn’t come as expected on July 10. APEC, had previously said that funds had been sent.

Providence, and its partner Lansdowne last Thursday said the backstop date for the receipt of the loan would be extended to close of business on Friday, July 12, adding that “should the required funds or adequate evidence that the transfer will be processed as a matter of urgency, the Board do not envisage giving any further extensions to the backstop date.”

Come Monday, a further extension was granted to APEC.

Providence said: “The company can confirm that it has received a letter from the legal representatives of APEC’s funder advising that on July 9, 2019, the funder arranged for the remittance of $US 10 million from HSBC to Providence’s account.

“The legal representatives further advise that the remittance is expected to be completed shortly pending compliance checks by the bank. Accordingly, to facilitate this, the Barryroe Partners have agreed to a backstop extension of on or before July 19, 2019.”

To remind, Providence and Lansdowne in March 2018 signed a farm-out agreement with APEC Energy Enterprise Limited in relation to SEL 1/11 offshore license, containing the Barryroe prospect

APEC is a privately owned Chinese company which has a strategic partnership with China Oilfield Services Co., Ltd and JIC Capital Management Ltd for the investment and development of offshore oil and gas opportunities worldwide utilizing Chinese drilling units, services, and equipment. The Chinese company, subject to certain conditions, is expected to be assigned a 50 percent working interest in the license.

The parties later in September 2018 agreed for APEC to provide an advance loan of $9 million to cover the costs associated with front-end well-site survey operations and pre-drill well consenting for Barryroe.

The advance loan was a part of a bigger deal which called for a total of $24 million allocated to fund the forward costs of Exola as the operator of the Barryroe project.

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.

The Barryroe oil accumulation lies in c. 100-meter water depth in the North Celtic Sea Basin and is located c. 50 km off the south coast of Ireland.

Providence has previously said that well site survey operations, subject to receipt of all regulatory consents and required financing, are expected to start Q3 2019. In its earlier 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.

Offshore Energy Today Staff

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