Providence Resources P.l.c. today provides a commercial and operational update in relation to Standard Exploration Licence (“SEL”) 1/11 which contains the Barryroe oil accumulation. SEL 1/11 is operated by EXOLA DAC ("EXOLA" or the “Operator”, 40%), a wholly-owned Providence subsidiary, on behalf of its partners, APEC Energy Enterprises Limited (“APEC”) and Lansdowne Celtic Sea Limited ("Lansdowne", 10%). 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.
On June 5, 2019, the Company announced that it had agreed certain amendments to the Farm-Out Agreement (the "Updated FOA") for the Barryroe Project with APEC and, together with EXOLA and Lansdowne, the "Barryroe Partners", including a revised backstop date with APEC for receipt of the US$ 9 million loan advance to June 14, 2019, which was subsequently extended to July 5, 2019. On July 8, 2019, the Company advised that it had received a remittance notification dated July 5, 2019 from APEC’s funder for the transfer of US$ 10 million in favour of Providence’s bank account in Dublin with a payment date of July 9, 2019. Of this amount, US$ 9 million was to cover EXOLA front-end and pre-drill costs with US$ 1 million to cover APEC costs. Therefore, a backstop extension to July 10, 2019 was agreed with APEC to allow for the receipt of funds.
Non-Receipt of Funds and Extension of Backstop Date
As of the close of business yesterday, no funds had been received in the Company’s account and the Company has not received any additional paperwork from the APEC funder nor its corresponding bank as to verify the actual transfer of funds. However, the Company has been given assurances that the transfer process is underway, but as of last night was not complete. The Barryroe Partners are seeking immediate clarification from APEC’s funders and its banks on the precise status of the transfer. Accordingly, to facilitate this, the Barryroe Partners have agreed to extend the backstop date to close of business on Friday, July 12, 2019. Should EXOLA and Lansdowne either not receive the required funds or adequate evidence that the transfer will be processed as a matter of urgency, the Board do not envisage giving any further extensions to the backstop date.