Barryroe Farm-Out Update
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).
1 October 2019
Lansdowne Oil & Gas plc
("Lansdowne" or the "Company")
Standard Exploration Licence 1/11
Barryroe, North Celtic Sea Basin
Update on Barryroe Farm-out Transaction
Lansdowne Oil & Gas plc (AIM: LOGP), the North Celtic Sea focused, oil and gas company, today provides a commercial update in relation to Standard Exploration Licence ("SEL") 1/11, which contains the Barryroe oil accumulation (the "Barryroe Project"). The Barryroe Project is operated by EXOLA DAC ("EXOLA" or the "Operator", 40%), a wholly-owned subsidiary of Providence Resources P.l.c ("Providence"), on behalf of its partners, APEC Energy Enterprises Limited ("APEC") and Lansdowne Celtic Sea Limited ("Lansdowne", 10%). The area 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.
On June 5, 2019, the Company announced that APEC, EXOLA and Lansdowne (together, the "Barryroe Partners") had agreed certain amendments to the Farm-Out Agreement (the "Updated FOA") for the Barryroe Project, including a revised backstop date with APEC for receipt of the US$9 million loan advance to June 14, 2019, which was subsequently extended through various extensions to September 30, 2019.
Non-Receipt of Funds
As at close of business on September 30, 2019, no funds had been received in EXOLA's account. Noting this specific contractual non-performance to the amended terms to the Updated FOA, Providence/EXOLA and Lansdowne have not agreed any further extension with APEC to the Updated FOA. Without prejudice to any other legal remedies that Providence/EXOLA and Lansdowne may have, EXOLA has now advised APEC that it will commence with the licence reversion process of APEC's 50% working interest in SEL 1/11 to EXOLA and Lansdowne on a 40% and 10% basis, respectively. Additionally, APEC has been advised that it no longer retains exclusivity over SEL 1/11 and that Providence/EXOLA and Lansdowne are free to initiate commercial discussions with third parties on the Barryroe asset. Further announcements will be made in due course.
Steve Boldy, Chief Executive Officer of Lansdowne, commented:
"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.
"Barryroe holds substantial 2C resources, independently audited at 346 MMBOE Gross. In the event Lansdowne reverts to 20% working interest, this results in net 2C Resources of 69 MMBOE. At our current share price these 2C resources are valued at only c.12c/BOE. The recent site survey has covered two locations, A & B, that will target both the Middle Wealden and Basal Wealden reservoirs and, combined with the area already appraised by the 48/24-10z well, can address more than 70% of the 2C resource potential".
For further information please contact:
Lansdowne Oil & Gas plc
+353 1 963 1760
SP Angel Corporate Finance LLP
+44 (0) 20 3470 0470
Nominated Adviser and Joint Broker
Brandon Hill Capital
+44 (0) 20 3463 5061
Qualified Person Review
This release has been reviewed by Stephen Boldy, Chief Executive of Lansdowne, who is a petroleum geologist with 39 years' experience in petroleum exploration and management. Dr Boldy has consented to the inclusion of the technical information in this release in the form and context in which it appears.
Notes to editors:
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
About Providence Resources
Providence Resources is an Irish based Oil & Gas Exploration Company with a portfolio of appraisal and exploration assets located offshore Ireland. Providence's shares are quoted on the AIM in London and the Euronext Growth Market in Dublin. Further information on Providence can be found on www.providenceresources.com
APEC Energy Enterprise Ltd. was established in 2014 as a Hong Kong registered company with headquarters in Beijing. In addition to its original focus on offshore oil & gas services, APEC provides upstream energy acquisition advice and management services in partnership with Chinese Oil Companies, offshore and onshore service providers, and SOE investment groups. www.apecenergy.com.
Barryroe, located in the North Celtic Sea Basin, off the south coast of Ireland, has had six wells successfully drilled on the structure. Hydrocarbons have been logged in all six wells, with flow test results from four wells. Four wells were drilled in the 1970's by Esso with a further appraisal well drilled in 1990 by Marathon Oil. The sixth well was drilled by Providence & Lansdowne in 2011/12. The oil is light (43° API) with a wax context of c. 17-20%. The successfully tested reservoir sands are of Cretaceous Middle and Lower Wealden age located between c. 4,500' TVDSS and 7,550' TVDSS. The field is covered by both 2D and 3D seismic, the latter which was acquired in 2011.
Following acquisition and interpretation of the new 2011 3D seismic data together with the subsequent drilling and testing of the 48/24-10z Barryroe appraisal well in 2012, Providence retained the services of Netherland Sewell & Associates Inc. (NSAI) to carry out a third party contingent resource audit (CPR) of the in-place hydrocarbon and recoverable resources for the Basal Wealden oil reservoir. NSAI reported that the Basal Wealden oil reservoir has a 2C in-place gross on-block volume of 761 MMBO with recoverable resources of 266 MMBO and 187 BCF of associated gas, based on a 35% oil recovery factor. A third party (CPR) audit of the overlying Middle Wealden, which was carried out by RPS Energy (RPS) in 2011, reported a 2C in-place gross on-block volume of 287 MMBO with technically recoverable resources of 45 MMBO and 21 BCF of associated gas, based on a 16% oil recovery factor.
The total combined audited gross on block 2C recoverable resources at Barryroe therefore amount to 346 MMBOE, comprising 311 MMBO and 207 BCF. The following table summarises the range of total gross audited on-block Barryroe oil resources:
1C 2C 3C
(MMBO) (MMBO) (MMBO)
Basal Wealden STOIIP (NSAI) 338 761 1,135
Basal Wealden Recoverable (NSAI) 85 266 511
Middle Wealden STOIIP (RPS) 31 287 706
Middle Wealden Recoverable (RPS) 4 45 113
TOTAL STOIIP 369 1,048 1,841
TOTAL RECOVERABLE OIL RESOURCES 89 311 624
Note: The table above excludes recoverable solution gas (i.e. 207 BCF or 34.5 MMBOE in the 2C case)
Further incremental resource potential has been identified in logged hydrocarbon bearing intervals within stacked Lower Wealden and Purbeckian sandstones which Providence has previously estimated contains total associated P90, P50 & P10 in place oil resources of 456 MMBO, 778 MMBO & 1,165 MMBO respectively. As there is currently limited reservoir and well test data available over these two intervals, future well data over these specific zones would be required in order to firm up their associated final recoverable resource estimates.
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