Euroil: third Barryroe farm-out falls through

Irish juniors Providence Resources and Lansdowne Oil & Gas have said they will proceed with the development of Ireland’s largest oil discovery on their own, after reporting that their third farm-out deal had collapsed.

The pair had hoped to farm out a 50% interest in the Barryroe oil and gas field in the Atlantic Ocean to Norway’s SpotOn Energy, under an agreement reached in December. SpotOn was to obtain at least $166mn of funding for an early development project at the field in return for its stake, while Schlumberger, Aker Solutions, AGR, Maersk Drilling, Keppel FELS and Aibe agreed to forgo some payment for project services in exchange for a share of future revenues.

The transaction ran into problems after SpotOn failed to secure funds from the Norwegian Export Credit Agency to cover 20% of the sum as hoped. The deadline for finalisation was therefore delayed by two months until April 30.

“Due to non-performance by SpotOn Energy pertaining to the financing solution required under the farm-out,” the Barryroe partners have elected to discontinue the agreement, the pair said in a statement on April 22.

They will now lead project development and funding arrangements themselves, and expect to finalise a funding solution by the end of the third quarter, ahead of the start of drilling in 2022.

Meanwhile in Norwegian waters, Neptune Energy and its partners reported on April 22 that drilling had commenced on four production wells at the Duva oil and gas field in the Norwegian North Sea.

The wells are being drilled by the semi-submersible Deepsea Yantai operated by Odfjell Drilling. They were pre-drilled and cased off at a depth of 2,500 metres ahead of the final drilling campaign starting.

Neptune is developing Duva as a fast-track subsea tieback to its Gjoa platform. It will host three oil wells and one gas producer. Production is on track to begin in the third quarter and plateau at 25,000 barrels of oil equivalent per day (boepd).

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