(Alliance News) - Providence Resources PLC on Thursday said it has begun a process to strip Chinese investors APEC Energy Enterprises of their 50% stake in the Barryroe oil field in the North Celtic Sea basin.
Both Providence, which before APEC being stripped had a 40% interest, and partners Lansdowne Oil & Gas PLC, which holds 10%, will double their stakes in the asset, reverting back to their previous holdings.
Providence, which operates the field through its subsidiary Exola DAC, will regain the 80% it initially had, with partners Lansdowne Oil & Gas PLC reverting back to a 20% interest.
In October, the two Barryroe partners said they will strip APEC of its exclusivity at the oil field, after the Chinese firm failed to cough up the USD9.0 million of funds it promised to go towards development of the project.
APEC at the time was advised that Lansdowne and Exola will pursue "a licence reversion process". The decision to strip APEC of the exclusivity came after months of stalemate between the investor and the Barryroe partners.
The farm-out agreement initially included a provision for APEC to provide the funds by June 14, though the deadline was extended several times. APEC previously gave assurances that the money was in the process of being released.
Providence has now kicked off the farm-out process again and reported a "number of companies are actively assessing the field data" at Barryroe.
They added: "Following the company's review of the field's resource potential, which confirms that there is a considerable gas resource within the Barryroe structure in addition to the recognised oil resource, which was the original focus of the farm-out process, several additional companies not included within the initial process have expressed interest in the gas potential and have been invited into the data room."
Providence added that it is preparing the farm-out "a material interest" in the Irish FEL3/04 licence, which contains the Dunquin South gas prospect.
Operator Eni SpA has told Providence that it plans to relinquish its interest in the licence.
Providence shares were 7.6% higher at 3.12 pence each in London on Thursday morning. Lansdowne was 4.0% lower at 0.60p.
By Eric Cunha; ericcunha@alliancenews.com
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