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Providence reviews funding options
Posted on Thursday, 13 February 2020 14:18
Shares in Providence Resources were up 3.5 per cent by 13:47 GMT today on news it is ending its Chinese partnership at the Barrryroe field, carrying out a new farm-out process and launching a strategic review for funding options.
The Irish oil and gas explorer said subsidiary Exola DAC has started the regulatory process required to transfer its 50.0 per cent equity in standard operating licence (SEL) 1/11, currently assigned to notified APEC Energy Enterprises, back to the original owners.
It noted this will result in its subsidiary and partner Lansdowne Celtic Sea reverting to their original 80.0 per cent and 20.0 per cent interests, respectively, on completion.
Furthermore, Exola DAC, as operator of Barryroe, which is contained within SEL 1/11, has restarted a farm-out process and a number of companies are actively assessing the field data.
Several additional interested parties have come forward since Providence’s review of the asset’s potential, which confirms “there is a considerable gas resource within the Barryroe structure in addition to the recognised oil resource”.
The company noted it is assessing the possibility for a carbon neutral gas development as an option for the field.
With regard to the strategic review, it said that following the appointment of a new chief executive in early January, it has been mainly focused in the short to mid-term on Barryroe field and finalising plans to facilitate its future development.
Providence advises it has sufficient working capital to fund costs through to the end of March or early April 2020.
The group has completed its redundancy programme and materially reduced the cost base.
However, it will need additional funds to provide sufficient working capital to support the business in the near term, especially with the farm-out process continuing, and the board is currently considering its funding options.
Providence last raised USD 3.76 million in September 2019, when it issued 59.77 million new shares at USD 6.30 cents.
Zephyr, the M&A database published by Bureau van Dijk, shows 327 deals targeting the mining, quarrying and oil and gas extraction sector have been announced in 2020 to date.
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