Monday 19 August 2019

Providence hit by fresh delay for Chinese funding

Providence Resources’ Barryroe operation, 50km off the coast of Cork
Providence Resources’ Barryroe operation, 50km off the coast of Cork
Ellie Donnelly

Ellie Donnelly

Shares in Providence Resources plunged by more than 20pc early yesterday after it extended a deadline to receive $10m (€8.9m) from Chinese backer APEC to July 26.

It is the latest in a series of delays in receiving the money.

Please log in or register with Independent.ie for free access to this article.

Log In

The Dublin-listed company previously said it had received a letter from HSBC Bank on July 5, saying the funds would be paid on July 9.

A deadline to receive the funds was then extended to July 12, when the group, headed by Tony O'Reilly Jnr, said it did not expect to give any further extension.

It was subsequently extended until July 19, and in a new statement yesterday, Providence said the money was still on its way.

It had received further documentation showing the mechanics of the transfer of the $10m in funds to its account, the oil and gas exploration firm said.

"However, due to ongoing banking processing delays, the funds have yet to be credited to Providence's account," the group said.

Providence and its associates, collectively known as the 'Barryroe Partners', have now agreed to an extension to July 26 for receipt of the money.

The loan is to fund a survey of the explorer's Barryroe prospect off the Cork coast.

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

Drilling operations at the Barryroe site are expected to take place in the fourth quarter of 2019, a date that has been pushed back because of the delay to the planned survey of the area.

The group now expects the survey to be carried out in the third quarter of this year, assuming it receives the funds.

Under the terms of the updated farm-out agreement with APEC, a total of $24m (previously $19.5m) has been allocated to fund the forward costs of Exola, operator of the Barryroe project.

Last year's results for the company showed that losses had declined to €4.8m for the year, from the €20.4m reported in 2017.

By the end of 2018, Providence had no debt.

Irish Independent

Also in Business