Thursday 22 August 2019

Providence further extends funding deadline

Ellie Donnelly

Ellie Donnelly

Providence Resources has extended its deadline to receive $10m (€8.9m) from Chinese backer APEC.

The deadline to obtain the funds had been extended to close of business yesterday, in what was the seventh delay encountered by the Irish oil and gas explorer in receiving the money.

In a statement today Providence said it has received further assurances that the loan advances due under the updated farm-out agreement are in the process of being paid. 

On the back of this, Providence and its partners – collectively known as the Barryroe Partners – have agreed to a backstop extension of on or before August 19.

Should the money not be received by then, Providence said it would need to put in place “alternative financing arrangements” in order to provide it with sufficient working capital beyond the end of the month.

Funding from APEC had initially been expected late last year, and was then due to be paid over on June 14.

The deadline was then further extended a number of times in July and this month.

Drilling operations at the Barryroe site are expected to take place in the fourth quarter of 2019.

Last week the group announced job cuts and other immediate cost-saving measures to address a cash crisis, with no sign of promised finance arriving from China.

Providence said it would leave its Donnybrook headquarters for a smaller office once its lease expires this autumn, reduce spending on service providers and advisers, and lay off support and technical staff, to slash its annual cost base from $5.3m to $1.9m.

Technical director John O'Sullivan was stepping down immediately, it said last Monday.

It added that it is not currently a revenue generating business and that over the past two years its working capital has been financed solely through the completion of farm-out deals with third parties.

On Friday, Providence said it had been granted permission  from  the  Minister  of  State  at  the Department  of  Communications,  Climate  Action  and  Environment to undertake a survey over the Barryroe field.

The survey will take place as early as this month should Providence receive the APEC funding, or if it receives another source of finance.

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