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(Alliance News) - Lansdowne Oil & Gas on Tuesday said the partners of an oil project in the North Celtic Sea basin will now pursue farm out discussions with other parties after a Chinese investor failed to cough up funds before the Monday deadline.
Lansdowne owns 10% of the Barryroe oil project while operator Providence Resources PLC's stake is 40%, through its subsidiary EXOLA DAC.
APEC Energy Enterprises, which promised to issue a USD9.0 million loan to fund work at the project, held a 50% holding in the licence. However, APEC has now been advised that Lansdowne and EXOLA will pursue "a licence reversion process" and it will no longer have exclusivity over the Barryroe project.
The decision to strip APEC of its exclusivity is the latest development in a dispute that has been in stalemate for several months.
The farm-out agreement initially included a provision for APEC to provide the loan to by June 14, to fund work on the field. Since then, however, the deadline for payment has been extended several times.
APEC previously gave assurances that the loan is in the process of being released.
Lansdowne Chief Executive Steve Boldy said: "We continue to believe Barryroe offers a highly attractive appraisal opportunity in shallow water for a number of potential industry farm-in partners. We are now free to pursue discussions with other interested parties while the door remains open for APEC to deliver funds as called for under the farm-out agreement and proceed with the planned drilling programme."
Shares in Lansdowne closed 12% lower at 0.88 pence each in London on Tuesday.
By Eric Cunha; ericcunha@alliancenews.com
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