Providence plunges as backer's €8m loan is delayed again
Shares in Providence Resources plunged 16pc yesterday, after Chinese backer APEC Energy Enterprises again delayed making a $9m (€8m) loan to fund a survey of the Irish oil and gas explorer's Barryroe prospect off the Cork coast.
The funding had initially been expected late last year, and was then due to be paid over on June 14. It is now due to be received on July 5, the company said.
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"Due to delays associated with internal transaction processing with their investors, Apec have formally requested a further extension of time for the payment of the initial US$ 9m loan."
Providence and its other partner in the project, Lansdowne, have agreed to this further extension of the backstop date to "no later than July 5, 2019", Providence said in a stock market update.
In a statement earlier this month Providence said it understood that the earlier delay in receiving the money was in part due to a change in "the composition of Apec's funding mechanism".
Davy Stockbroker's Job Langbroek said delays by Irish authorities in processing permits may also have been a factor.
"It is hard not to also feel that the delay in permitting to commence the site survey offshore Ireland - for which the loan funds are intended - has not speeded up the process either," he said in a note.
Drilling operations at the Barryroe site, 50km off the Cork coast, 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 at the site.
The group now expects the survey to be carried out in the third quarter of this year.
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, which is the operator of the Barryroe project. These costs include the well-site survey operations and other project related expenditure.