Providence Resources today provides a commercial and operational update in relation to Standard Exploration Licence (“SEL”) 1/11 which contains the Barryroe oil accumulation. SEL 1/11 is operated by EXOLA DAC ("EXOLA" or the “Operator”, 40%), a wholly-owned Providence subsidiary, on behalf of its partners, APEC Energy Enterprises Limited (“APEC”) and Lansdowne Celtic Sea Limited ("Lansdowne", 10%). The area lies in c. 100 metre water depth in the North Celtic Sea Basin and is located c. 50 km off the south coast of Ireland.
On June 5, 2019, the Company announced that it had agreed certain amendments to the Farm-Out Agreement (the "Updated FOA") for the Barryroe Project with APEC Energy Enterprises Limited ("APEC") and, together with EXOLA and Lansdowne, the "Barryroe Partners", including a revised backstop date with APEC for receipt of the US$ 9 million loan advance to June 14, 2019, which was subsequently extended through various extensions to August 12, 2019.
Extension of Backstop Date
As at close of business on August 12, 2019, no funds had been received in the Company’s account but the Company has received further assurances that the US$ 9 million loan advances due under the Updated FOA are in the process of being paid. Accordingly, the Barryroe Partners have agreed to a backstop extension of on or before August 19, 2019. Should these funds not be received by the revised backstop date and taking into account creditors on the balance sheet and existing forward commitments, including the necessary planned site survey at Barryroe and the proposed business re-engineering, the Company would need to put in place alternative financing arrangements in order to provide it with sufficient working capital beyond the end of August 2019.
Update on Site Survey
On August 9, 2019, the Barryroe Partners confirmed that they have received permission from the Minister of State at the Department of Communications, Climate Action and Environment to undertake a seabed debris clearance, environmental baseline and habitat assessment site survey (the “site survey”) over the area of the Barryroe field within SEL 1/11. The nominated vessel is currently finishing up current activities in the North Sea prior to the planned mobilization to Barryroe. Pursuant to the terms of the Updated Farm-out Agreement with APEC (as amended), and subject to the receipt of funding from APEC or alternative financing arrangements being put in place, the site survey is expected to commence later this month.