Page 12 - EurOil Week 09 2021

EurOil PROJECTS & COMPANIES EurOil

Barryroe farm-out deal stalls

IRELAND IRISH junior Providence Resources and Nor- investors,” Providence explained in a statement. “Dis-
way’s SpotOn Energy have pushed back the cussions to secure this increased commitment are
The farm-out was deadline for closing a farm-out deal at the Bar- well advanced. SpotOn has confirmed that it believes
conditional on SpotOn ryroe oil and gas field in the Celtic Sea by two that funding will be completed within the period
securing financing, months until April 30. granted under the extension.”
and there have been Providence agreed to transfer a 50% interest in Once the deal is closed, Providence will be
setbacks there. Barryroe, Ireland’s largest offshore oil find, to Spo- left with a 40% position at Barryroe, while its
tOn in December, ending its years-long search for fellow Irish partner Lansdown Oil & Gas will
a partner. In return, SpotOn and a group of inter- keep 10%.
national oilfield service providers will fund and Providence recently dismissed a report in the
develop the project, taking it to first oil. Irish press that it was holding merger talks with
The farm-out was conditional on SpotOn SpotOn. The company also secured approval
obtaining at least $166mn in financing to cover last month from the Irish authorities to conduct
100% of the cost of an early production scheme pre-drilling surveys at Barryroe.
at Barryroe. The deal’s terms remain the same, Barryroe has been hailed as the answer to
but SpotOn has requested more time after failing Irish energy security, enabling the country to
to secure 20% of this sum from the Norwegian reduce its oil and gas imports, most of which
Export Credit Agency. come from the UK North Sea. But there is grow-
“An alternative funding structure has been pro- ing opposition to upstream development in
posed by SpotOn involving an increased contribu- Ireland, potentially jeopardising Barryroe and
tion to the financing by the consortium and the bond up-and-coming projects. ™

Neptune on track with output in 2020

NORTH SEA NORTH Sea-focused Neptune Energy hit the After reining in spending last year in response
midpoint of its output guidance for 2020, pro- to the pandemic, Neptune is targeting a further
Neptune has fared ducing an average of 142,400 barrels of oil equiv- reduction in capital expenditure in 2021 to
better than many of alent per day (boepd) despite outages. $700mn, most of which will be spent in the first
its rivals thanks to its Its guidance range for the year was 140,000- half of the year. Together with the anticipated
strong hedging position. 150,000 boepd, and it anticipates production rise in production, this should mean Neptune
reaching 200,000 boepd in 2023, as more fields enjoys increased cash flow in the second part
in its “low cost, low carbon” portfolio are brought of the year. Capital spending will fall further in
on stream. 2022 and 2023.
“With these higher production volumes and Neptune has set its exploration and appraisal
lower capital expenditure on sanctioned pro- budget at around $150mn in 2021, with up to 11
jects, we expect to generate higher cash flows that wells to be drilled. Its drilling programme will
will support our longer-term growth opportuni- involve appraisal wells at the Dugong and Maha
ties,” CEO Jim House commented on the result. discoveries and an exploration well targeting the
A serious fire broke out at the Equinor-led Dugong Tail prospect.
Hammerfest LNG plant in late September last Neptune fared better than many of its rivals
year, causing output to halt at the Snohvit field last year thanks to its strong hedging position
that supplies its gas. Neptune has a 12% inter- and it will retain this in 2021. This may prove
est in Snohvit. Equinor has warned it could take disadvantageous if oil and gas prices continue
Hammerfest LNG until October 2021 to restart. on their current recovery. Brent is now trading
Output at the Touat field in Algeria, in which at over $66 per barrel, which is higher than its
Neptune has a 65% interest, was also halted last price before the pandemic.
year so that repairs could take place. Touat began The company also said it was continuing to
exporting gas in September 2019 but technical benefit from tax breaks awarded by the Nor-
issues at its processing facility were discovered wegian authorities for new developments last
after Spanish contractor Tecnicas Reunidas summer. It added it remained fully funded
transferred day-to-day operations at the facil- from projected operating cash flow, enjoying
ity in June last year. Touat is expected to restart significant liquidity, but cautioned that its lever-
before the end of the current quarter. age would rise over the current quarter. It will
Neptune has also just received a boost from decline to around 1.5 over the second half of the
the start-up of the Gjoa P1 project in Norway. year, however, Neptune said.
The company is also a partner in the Duva oil- Neptune intends to pay a $200mn interim
field off the country’s coast, which is on track for dividend for the 2021 financial year, after miss-
first oil later this year. In addition, it is awaiting ing payments in 2020. It will release its financial
the launch of the Merakes gas field off Indonesia. results for 2020 on March 11, it said. ™

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