Tuesday 22 October 2019

Providence stays silent on €8m funding advance

Delays: The Barryroe operation, 50km off the coast of Cork
Delays: The Barryroe operation, 50km off the coast of Cork
Ellie Donnelly

Ellie Donnelly

Irish oil and gas company Providence Resources has refused to say whether it has received a $9m (€8m) advance in funding from Apec, its farm-in partner in Barryroe.

The funding was due by June 14. When contacted by the Irish Independent, the company said it would not comment on whether the money had been transferred.

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The exploration group, headed by Tony O'Reilly Jr, had initially expected to receive the funds late last year. In a statement earlier this month it said it understood that the delay in receiving the money was in part due to a change in "the composition of Apec's funding mechanism".

The Dublin-listed group said drilling operations at the Barryroe site, 50km off the Cork coast, are expected to take place in the fourth quarter of 2019.

It had previously planned for operations to take place in the middle of this year, but this was delayed after Providence postponed a planned survey at the site, which had originally been scheduled for late last year.

The group now expects the survey to be carried out in the third quarter of this year. "The update from Providence related to the farm-out of the Barryroe oil and gas project offshore Ireland will unsettle shareholders," analysts with Davy Stockbrokers said in a note at the time.

"Delays involved in securing a site survey permit and provision of agreed loans from Apec have pushed the first farm-in well timing to quarter four 2019," the Davy note added.

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 carrying out the well-site survey operations and other project related expenditure.

Founded in 1997, Providence Resources traces its roots back to 1981 when predecessor company Atlantic Resources was formed by a group of investors led by Anthony O'Reilly Sr. The group will announce its results for 2018 later this month.

Irish Independent

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