Barryroe Farm-Out Suffers Delay
Irish explorer Providence Resources has agreed to extend the deadline for closing a farm-out to Norway's SpotOn Energy at the Barryroe oil and gas field off Ireland's south coast by two months until April 30, it said on March 1.
The farm-out, agreed at the start of December, will see SpotOn take a 50% stake in Barryroe, Ireland's largest oil discovery. In return, the company and a group of international service providers will fund, develop and bring the project to production.
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The terms of the deal remain the same. But the transaction was conditional on SpotOn securing at least $166mn of funding to cover 100% of early development costs at Barryroe, and the company has been unable to secure 20% of this sum from the Norwegian Export Credit Agency as hoped.
"An alternative funding structure has been proposed by SpotOn involving an increased contribution to the financing by the consortium and the bond investors," Providence said in a statement. "Discussions to secure this increased commitment are well advanced. SpotOn has confirmed that it believes that funding will be completed within the period granted under the extension."
The farm-out will leave Providence with a 40% interest in Barryroe and partner Lansdowne Oil & Gas with 10%. Providence denied holding merger talks with SpotOn in early February following a report in the Irish press. It also secured approval last month to undertake surveys at Barryroe, needed to prepare for drilling operations.