Business Irish

Tuesday 17 September 2019

Providence Resources extends funding deadline for two weeks

Barryroe drilling operation
Barryroe drilling operation
Ellie Donnelly

Ellie Donnelly

OIL and gas explorer Providence Resources has extended the deadline to received funds from Chinese backer APEC until September 30.

The $9m (€8.2m) loan was due to be received by the Tony O'Reilly Jnr-headed company by close of business yesterday, in what was the latest in a series of delays in the funds being transferred.

Providence last week said it was considering legal action against Beijing-headquartered APEC for non-performance of contract.

The group said it “issued written notice to APEC that, should the APEC loan amount not be received by the close of business on September 9, 2019, the company reserved the right to end exclusivity, while also considering all legal remedies available to it against APEC for contract non-performance, including the re-assignment of equity in SEL 1/11.”

This includes the reallocation of equity in the Barryroe prospect off the coast of Cork.

Under the agreement with APEC, agreed in March 2018, the Chinese group will have a 50pc interest in Barryroe - which has a predicted 311 million barrels of recoverable oil - in exchange for it covering half of the estimated $200m costs associated with the drilling programme.

Providence again today reiterated that it is actively exploring “alternative financing arrangements” to provide it with sufficient working capital beyond the end of this month.

Last month, Providence secured permission from the Minister of State at the Department of Communications, Climate Action and Environment to undertake a seabed debris clearance and an environmental baseline and habitat assessment site survey over the area of the Barryroe field.

While full completion of the survey is depending on the group receiving the funds from APEC or alternative finance, Providence has enough working capital to undertake the survey at two locations.

The site survey of the first location has been completed, and the company has already started site survey operations over the second location. 

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