Sunday 25 August 2019

Providence pushes deadline for Chinese funds again

Backstop: Tony O’Reilly Jnr of Providence Resources. Photo: Finbarr O'Rourke
Backstop: Tony O’Reilly Jnr of Providence Resources. Photo: Finbarr O'Rourke
Ellie Donnelly

Ellie Donnelly

Irish oil and gas explorer Providence Resources has extended the deadline for receiving $10m (€8.9m) from its Chinese backer APEC to July 19.

The revised date is the latest in a series of delays.

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Sources close to the situation said there were no concerns about the money arriving by the end of this week.

Meanwhile, investors showed little reaction to the update, with the company's share price up 0.8pc in afternoon trading yesterday.

The group previously said it had received correspondence from HSBC Bank on July 5, saying the funds would be paid on July 9.

But by close of business last Wednesday, July 10, the funds had not been received and Providence extended the deadline to July 12.

In a statement yesterday, the company, headed by Tony O'Reilly Jnr, said it received a letter from a legal representative of APEC's funds provider saying that the money was being transferred.

The Dublin-listed company has been advised the payment is expected to be completed shortly, pending compliance checks by APEC's bank.

To facilitate this, Providence and its associates, collectively known as the 'Barryroe Partners,' have agreed to a backstop extension of July 19 for receipt of the money.

The loan is to be used to fund a survey of the Irish oil and gas 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 last. This was then extended to July 5.

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 at the site.

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 Providence showed that losses had declined to €4.8m for the year, from a loss of €20.4m reported in 2017.

Irish Independent

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