Providence Resources has provided a commercial update on Standard Exploration Licence ('SEL') 1/11 that contains the Barryroe oil accumulation.Â  SEL 1/11 is operated by EXOLA (80%), a wholly-owned Providence subsidiary, on behalf of its partner Lansdowne Celtic Sea (20%), collectively referred to as the 'Barryroe Partners'. 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.Standard Exploration Licence ('SEL') 1/11 Farm-Out The Company has announced that the Barryroe Partners have signed a Farm-Out Agreement ('FOA') with APEC in relation to SEL 1/11.Â  APEC is a privately owned Chinese company which has a strategic partnership with China Oilfield Services ('COSL') and JIC Capital Management ('JIC') for the investment and development of offshore oil and gas opportunities worldwide utilising Chinese drilling units, services and equipment.Under the terms of the FOA, in consideration for APEC being assigned a 50% working interest in SEL 1/11:Commercial TermsOperational TermsIssuance of Warrants to APECUpon completion of the Drilling Programme, APEC will be able to subscribe for warrants over 59.2 million shares in Providence at a strike price of Â£0.12 per share (the 'Warrants'). Â  The Warrants, representing circa 9.9% of the current issued share capital of Providence, are exercisable for a period of 6 months following the completion of the Drilling Programme.Closing The Closing of the Farm-Out, which is expected to occur in Q3 2018, is conditional on completion of all ancillary legal documentation required to implement the terms of the FOA, and is subject to the approval of the Minister of State at the Department of Communications, Climate Action and Environment and the approval of the Chinese government.Â  In addition, the details of and schedule for the Drilling Programme are subject to further ongoing technical discussions between the Consortium, Exola and Lansdowne.Â  Subject to Closing, the revised equity in SEL 1/11 will be EXOLA (Operator, 40%), APEC (50%) & Lansdowne (10%).Â Further announcements on the transaction will be made in due course.Speaking today, Tony O'Reilly, Chief Executive of Providence said:'This is a significant transaction for Providence and Lansdowne which will deliver multiple new penetrations of the areally extensive Barryroe field.Â  In addition, it also provides for the acquisition of modern dynamic well test data that should assist in advancing the field to production.Â  Over the coming months, we will be working with the APEC Consortium to close the transaction and finalise the specific timeline and the precise details of the drilling programme.Â  We are very pleased to have agreed this deal, which will allow us to avail of 'state of the art' drilling units and technical capabilities in order to advance Barryroe to first oil.'Mr. Colin Lui, Chairman of APEC Energy Enterprise Limited commented:'APEC,Â supported by Jianyin Investment Company and China Offshore Services Ltd, are very pleased to have strategically joined forces with Providence and Lansdowne to develop the Barryroe field.Â  This field has significant recoverable resources and we look forward to jointly developing this opportunity. Â Whilst the Farm-Out Agreement has been agreed specifically for Barryroe, the parties have also agreed to jointly investigate further opportunities in other licensed blocks offshore Ireland in the future.'Original article linkSource: Providence Resources
Providence (->50%) and Lansdowne (->0%) farm out a 50% WI in EL 01/11 (Barryroe) to a Chinese consortium led by APEC.