TIDMLOGP
RNS Number : 9840G
Lansdowne Oil & Gas plc
30 November 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain. If you have any queries on this, then please contact
Steve Boldy, the Chief Executive Officer of the Company
(responsible for arranging release of this announcement).
30 November 2020
Lansdowne Oil & Gas plc
("Lansdowne" or the "Company")
Barryroe Update (SEL 1/11)
Farm-Out Agreement Signed
Lansdowne and Providence Resources P.l.c. ("Providence") have
agreed to Farm-out a 50% working interest in the Barryroe Oil and
Gas Field to SpotOn Energy Ltd. ("SpotOn"), a Norwegian based
resources company partnering with a Consortium of International
Service Providers (together "SpotOn Consortium") to fund, develop
and produce the Barryroe Oil and Gas Field.
The Barryroe Oil and Gas Field lies c. 50 km off the south coast
of Ireland in shallow water (c. 100 m water-depth) and is one of
the largest undeveloped oil and gas fields offshore Europe, with
independently audited 2C resources of 346 MMboe and significant
further resource potential in additional reservoirs.
The SpotOn Consortium will fund 100% of the Early Development
Programme ("EDP") and the Full Field Development.
The EDP, which includes four wells and floating production
facilities, is designed to both appraise and produce the Barryroe
Field, generating the technical data required to optimise the Full
Field Development Programme.
The SpotOn Consortium holds the experience, financial
wherewithal and expertise to move ahead with the Barryroe
project.
SpotOn will finance Lansdowne and Providence's 50% share of the
EDP costs by way of a Non-Recourse Loan, which is secured against
future Barryroe Production Cashflow
Lansdowne Oil & Gas plc (AIM: LOGP), the North Celtic Sea
focused, oil and gas company, is pleased to provide a commercial
update on Standard Exploration Licence ("SEL") 1/11 which includes
the Barryroe oil and gas field. Lansdowne holds a 20% interest in
SEL1/11 through its 100% owned subsidiary, Lansdowne Celtic Sea
Limited, with EXOLA DAC ("EXOLA"), a wholly owned subsidiary of
Providence Resources, holding the remaining 80% and being Operator
of the Licence, collectively the "Barryroe Partners". SEL1/11 lies
in c. 100 metre water depth in the North Celtic Sea Basin and is
located c. 50 km off the south coast of Ireland.
The Company is pleased to announce that the Barryroe Partners
have signed a Farm-Out Agreement ("FOA") with SpotOn Energy Ltd
("SpotOn") in relation to SEL 1/11.
Under the terms of the FOA, in consideration for SpotOn being
assigned a 50% working interest in SEL 1/11, SpotOn, upon closing
of the Farm-Out, is committing to the following commercial terms
and work programme commitments:
Main Commercial Terms
-- SpotOn farms-in to a 50% interest in SEL 1/11 which includes
the Barryroe oil and gas field. Lansdowne will retain a 10%
interest, and EXOLA a 40% interest in SEL 1/11.
-- The farm-in is conditional upon SpotOn confirming that a
minimum of US$ 166 million in funding (the agreed funding), for the
Early Development Programme (EDP) is in place and Irish government
approval for the Farmout agreement has been received.
-- SpotOn provides a $5million non-recourse loan to Providence
to fund EXOLA in the preparatory and permitting works required to
progress the EDP Work Programme for the Barryroe Oil and Gas
Field.
-- SpotOn is directly responsible for paying 50% of all cost
obligations associated with the EDP Work Programme and the Full
Field Development of the Barryroe oil and gas field.
-- SpotOn will also provide finance, by way of non-recourse loan
facilities, for the remaining 50% of agreed cost obligations
attributable to Lansdowne & EXOLA in respect of the EDP Work
Programme and the Full Field Development.
-- The funding will incur a blended average annual interest rate
of less than 8% through the repayment period which will be
repayable from SEL 1/11 production cashflow. SpotOn is entitled to
80% of the net production cashflow from SEL 1/11 until the debt is
repaid.
-- Following debt repayment, SpotOn will be entitled to 50% of
the net production cashflow from SEL 1/11 with Lansdowne &
EXOLA being entitled to 10% and 40% of net production cashflow,
respectively.
Work Programme Commitments (Subject to Regulatory Approval)
-- The EDP work programme, subject to declaration of
commerciality and the granting of a Petroleum Lease, is focused
upon delivery of production from the Eastern panel within the
Barryroe Licence area of the Barryroe oil and gas field as a
precursor to the phased full field development of the field and
will include:
-- Drilling and completing three production wells each with a
horizontal production section in the Basal Wealden A reservoir.
-- Drilling and completing a water injection well in the Basal Wealden A reservoir.
-- The four wells will be directionally drilled to access
optimum locations within the Eastern panel and will deliver further
information on the main Basal Wealden reservoir.
-- The horizontal reservoir sections will be designed to
maximise production and may extend into adjacent reservoir panels
to assess reservoir connectivity.
-- The wells will be completed with subsea trees; tied into a
production manifold and connected to a leased FPSO with production
separation, water and gas injection capabilities and include flow
assurance measures.
-- Planning for the drilling of these wells is at an advanced
stage with two well site locations already surveyed and a third
location which is subject to Ministerial approval.
-- The SpotOn Consortium is sourcing the rig which, subject to
regulatory approval, expects to mobilise to the Barryroe oil and
gas field in late 2022.
-- SpotOn will be appointed Technical Advisor and work in
partnership with EXOLA to prepare the detailed work programme for
the EDP.
-- EXOLA as Operator of SEL 1/11 will work with SpotOn to
expedite the transfer of operatorship to SpotOn, subject to
Government approvals.
Closing
The Closing of the Farm-Out ("Closing"), is conditional on
completion of all ancillary documentation required to implement the
terms of the FOA and is subject to the approval of the Minister at
the Department of the Environment, Climate and Communications.
Steve Boldy CEO of Lansdowne Oil & Gas commented:
"We are delighted to have signed the Farm-out Agreement for the
Barryroe field, which provides a clear path forward to production
of oil and gas via the Early Development Programme. Indigenous
energy supplies for Ireland will become increasingly important in
light of declining gas production from the Corrib Field and
Barryroe will make a critical contribution as Ireland transits to a
low carbon future. Lansdowne also supports fully the initiatives
being pursued to evaluate Carbon Capture and Storage potential to
accompany production. We look forward to working closely with EXOLA
and SpotOn to progress the project to fruition."
For further information please contact:
Lansdowne Oil & Gas plc +353 1 963 1760
Steve Boldy
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Nominated Adviser and Joint Broker
Stuart Gledhill
Richard Hail
Brandon Hill Capital +44 (0) 20 3463 5061
Joint Broker
Oliver Stansfield
Notes to editors:
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focused,
oil and gas exploration and appraisal company quoted on the AIM
market and head quartered in Dublin.
For more information on Lansdowne, please refer to
www.lansdowneoilandgas.com .
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