Lansdowne Oil & Gas PLC (LON:LOGP) chief executive Steve Boldy told investors that the Irish explorer is looking forward with “great excitement” as a new binding partnership agreement has now been signed for the Barryroe farm-out.
It agreement covers a programme of four vertical wells and one horizontal sidetrack plus the option to extend the programme with a further two horizontal wells.
A survey of the proposed well sites will now be advanced in the fourth quarter of this year, setting up a timeline for rig mobilisation during the second quarter of 2019.
The rig contracting process is described as being at an advanced stage.
The deal sees the partner directly cover 50% of the programme costs, and, it will provide non-recourse loan financing to operator Providence Resources and Lansdowne, with the repayments to be recouped through the Barryroe field’s early cashflows (effectively, the Chinese group will be entitled to 80% of the production cashflow during the repayment period).
Once it is repaid, the entitlements will revert proportionately to the project stakeholders – so Lansdowne will be due 10% and Providence will receive 40%.
Steve Boldy, in a statement, said: "The finalization of this binding farm-out with APEC is a result of a great deal of hard work over the last few months.
“The revised, enhanced drilling programme will evaluate fully the potential of Barryroe, without additional upfront costs to Lansdowne and we look forward to this with great excitement."