Barryroe Farm-out Update

Providence Resources announces extension of farm-out agreement 

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014.

Dublin and London – March 1st - Providence Resources P.l.c. (PVR LN, PRP ID), the Irish based resource development company (“Providence” or the “Company”), announces an extension to the farm-out agreement for the Barryroe licence. 

• Farm-out agreement with SpotOn Energy extended for a period of two months
• Additional time required to finalise agreement with participants in financing structure
• No change to overall development proposal

Providence announces that it has agreed to extend the current farm-out agreement with SpotOn Energy by an additional two months, until April 30^th, 2021. The overall structure of the farm-out as set out below remains and SpotOn’s funding obligations remain unchanged. However, the conditions to be fulfilled to attract investment from the Norwegian Export Credit Agency (GIEK), have altered from those originally proposed. SpotOn are negotiating a restructuring of the funding components and the extension is designed to provide time to complete the funding.

Reason and Background to Extension of Agreement

In November 2020 (RNS 30^th Nov) the Barryroe partners completed a farm-out agreement with SpotOn Energy Limited, a Norwegian Resources company, for a 50% share in SEL 1/11 located off the south coast of Ireland and which includes the undeveloped Barryroe oil and gas field. In return for this 50% share in the project SpotOn Energy Limited and its Consortium partners, a group of International oil and gas industry service companies, undertook to fund, develop and produce the Barryroe field.

A conditional part of the farm-out agreement involves SpotOn securing a minimum of $166m in funding to finance 100% of the costs associated with an early development programme for Barryroe.

The Barryroe partners have been advised that SpotOn is confident of raising the funds set out in the farm-out agreement.   However, the financing structure has had to be adjusted to reflect the fact that GIEK is unable to participate in the Barryroe funding consortium in the form originally proposed. GIEK’s original commitment was for c. 20% of the overall funding. An alternative funding structure has been proposed by SpotOn involving an increased contribution to the financing by the Consortium and the Bond Investors. 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 overall scale and shape of the development proposal remains unchanged.