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Providence Resources PLC

Providence Resources amends Barryroe farm-out and updates project timeline

The planned well site survey is now expected in the third quarter and the drill programme will start in the fourth.

oil and gas operations
An extra US$24mln has been allocated to cover costs

Providence Resources PLC (LON:PVR) has updated investors on its farm-out transaction for the Barryroe field, as it has amended the deal terms to incorporate additional costs.

The company, in a statement, said that an additional US$24mln has been allocated in the agreement to fund Providence subsidiary EXOLA for the well-site survey operations, preparations for a drill programme and other project costs.

The changes also reflect the ‘augmented scope of operator-related costs associated with the drilling programme’, Providence added.

READ: Providence Resources defers well site survey for Dunquin South

Some US$9mln of the US$24mln total specifically covers costs associated with a front-end well-site survey operations, which have not been incurred yet due to a previously announced legal challenge against the permitting for the programme.

The US$15mln balance is payable prior to the spudding of the first well, to cover operator related costs.

These costs will be financed by APEC, under the non-recourse loan financing arrangements.

Providence also noted that there has been a delay in the release of US$9mln from its Chinese partner, though due to the delay to the site survey programme the funds are not yet needed.

A new backstop date of 14 June has been agreed.

The company updated on the anticipated timeline for the delayed Barryroe site survey, which is now anticipated in the third quarter of this year.

Consequently, it is now expected that the Barryroe well drilling programme will begin in the fourth quarter, rather than the third. The start of drilling is subject to regulatory consents and the completion of the financing.

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Price: £0.06

Market: AIM
Market Cap: £34.37 m
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