Page 12 - EurOil Week 17 2021

EurOil PROJECTS & COMPANIES EurOil

Third farm-out deal at Barryroe

falls through

IRELAND IRISH juniors Providence Resources and Lans- a $2.5mn share sale portion of the fundraise,
downe Oil & Gas have said they will proceed with the remainder set to come from the issue of
The previous farm-out with the development of Ireland’s largest oil dis- warrants that give buyers the right to buy shares
deal collapsed in 2019. covery on their own, after reporting that their for up to a year.
third farm-out deal had collapsed. Providence also plans to raise about $80mn
The pair had hoped to farm out a 50% interest through a bond issue in the Nordic markets.
in the Barryroe oil and gas field in the Atlantic Shares in Providence were down 14.3% on
Ocean to Norway’s SpotOn Energy, under an April 22 after the news broke, falling below
agreement reached in December. SpotOn was GBP0.03 ($0.04).
due to obtain at least $166mn of funding for an “Having actively supported SpotOn over
early development project at the field in return the past year, it is disappointing that it’s become
for its stake, while Schlumberger, Aker Solutions, necessary to terminate the farm-out process
AGR, Maersk Drilling, Keppel FELS and Aibe with them,” Providence CEO Alan Linn said in
agreed to forgo some payment for project ser- a statement. “However, we are looking forward
vices in exchange for a share of future revenues. and actively building a revised development
The transaction ran into problems after Spo- partnership with key service providers and a
tOn failed to secure funds from the Norwegian financing package designed to meet the needs
Export Credit Agency to cover 20% of the sum of the project. We have been encouraged by the
as hoped. The deadline for finalisation was there- support we are receiving from service providers
fore delayed by two months until April 30. and banks and the commitments being offered
“Due to non-performance by SpotOn Energy to work with us in progressing the project.”
pertaining to the financing solution required With the farm-out deal now over, Providence
under the farm-out, the Barryroe partners have will retain its 80% interest in Barryroe while
elected to discontinue the agreement,” the pair Lansdowne will keep its 20%. The pair have been
said in a statement on April 22. struggling to bring on board a farm-in partner
They will now lead project development and with financial clout for years. They reached a
funding arrangements themselves, and expect to preliminary deal with Sequoia Petroleum but
finalise a funding solution by the end of the third that fell through in 2015, after the selected part-
quarter, ahead of the start of drilling in 2022. ner failed to raise the needed funds. A second
This solution is set to include payment defer- agreement with China’s APEC Energy was also
rals to service providers as before, on equivalent abandoned in 2019 after the partners missed
or better terms, and a bond issue. Providence a series of deadlines to provide the previously
said it intended to raise $5mn to cover an initial agreed cash.
sum that was due from SpotOn to cover prepara- Barryroe is estimated to hold almost 350mn
tory work for drilling, One of its main investors, barrels of oil equivalent (boe) of mostly crude
Pageant Holdings, has also agreed to underwrite but also commercial amounts of natural gas. ™

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