Apec keeps Providence waiting on $10m funds

Irish player Providence Resources has given Chinese partner Apec Energy more time to come through with a promised $10 million payment despite all-but ruling out a further extension late last week.

On Monday, Providence said: "The company can confirm that it has received a letter from the legal representatives of Apec’s funder advising that on July 9, 2019, the funder arranged for the remittance of $10 million from HSBC to Providence’s account.

“The legal representatives further advise that the remittance is expected to be completed shortly pending compliance checks by the bank.

“Accordingly, to facilitate this, the Barryroe partners have agreed to a backstop extension of on or before July 19, 2019.”

On Thursday, Providence said it had sought clarification from Apec’s funders and its bank – HSBC – as to the status of the transfer, agreeing at that time to a new backstop date of Friday, 12 July.

"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,” Providence said on Thursday.

Shares in both Providence and Lansdowne were down on Thursday. On Monday, Providence’s stock was initally slightly down before recovering and edging up, while Lansdowne’s shares were up more than 10%.

On 5 June, Providence had said that it had agreed a series of amendments to its deal with Apec in the months before that, extending the backstop date at that time to 14 June, from a previous deadline of 31 May.

It said at that time that it understood the delay in payment to be in part due to "a change in the composition of Apec's funding mechanism".

The initial farm-in deal with Apec, in March last year, called for the Chinese-backed player to pay 50% of costs related to the drilling of three lateral wells plus associated sidetracks and testing.

It was also to fund the remaining 50% of all costs of all field partners for the drilling programme, via a non-recourse loan facility, and was to provide the rig.

Providence has previously said it expects the first well in the campaign to be drilled about 4.3 kilometres west and about 25 metres at Base Wealden level to the previous 48/24-10z well, which flowed at a rate of about 4000 barrels of oil equivalent per day.

It then plans to sidetrack the well to drill and test a prognosed 200-metre Base Wealden section.

The Barryroe field sits in 100 metres of water about 50 kilometres off the Irish coast.