SpotOn Energy Signs Term Sheet to Farm in to SEL 1/11 (Barryroe Field)
SpotOn Energy Ltd., a privately held Norwegian E&P company registered in the UK, has entered into a non-binding term sheet with AIM-listed Irish explorer Providence Resources Plc to farm in to exploration license SEL 1/11 offshore Ireland. Exola DAC, a wholly-owned subsidiary of Providence, currently holds an 80% operated interest in the license, with Lansdowne Celtic Sea Ltd. holding the remaining 20%.
Under the terms of the agreement, SpotOn Energy has been granted a period of exclusivity until October 31st, 2020, during which time the companies will seek to agree an appraisal work programme and develop commercial terms for the Barryroe Field, and conclude a binding farm out agreement. In addition, SpotOn Energy has also agreed to invest an initial £300,000 in Providence by subscribing for news shares, and intends to make a further investment of £200,000 within 6-weeks of the transaction announcement, through a subscription for new shares at the prevailing market price.
SEL 1/11 is located in the North Celtic Sea Basin, situated approximately 50 km off the south coast of Ireland in water depths of ~100 m. The licence contains the Barryroe oil accumulation, which lies adjacent to the giant Petronas-operated Kinsale Head Gas Field. Previously, in March 2018, Providence and Lansdowne had entered into an agreement with a Chinese consortium led by APEC Energy Enterprise Ltd. to farm out a 50% working interest in SEL 1/11. The transaction was subsequently terminated when APEC failed to meet its initial US$10 million obligation under the terms of that agreement. Subsequently, in February this year, the companies re-initiated a farm-out process seeking a new partner for the license.