Providence Resources completes farm-out of Licensing Option 16/27 to TOTAL
Wednesday, Oct 18, 2017
Providence Resources has provided an update on Licensing Option ('LO') 16/27.  Providence has confirmed that the agreed farm-in by TOTAL E&P Ireland, a wholly owned subsidiary of TOTAL. has now completed.  This follows approval of the Minister of State at the Department of Communications, Climate Action and Environment to the transfer of 50% equity and Operatorship of LO 16/27 (Avalon) to TOTAL.

In June 2017, Providence announced that, along with Sosina Exploration, it had signed a Farm-in Agreement ('FIA') with TOTAL whereby TOTAL will take a 50% working interest and Operatorship in LO 16/27, subject to Ministerial approval.  Under the terms of the FIA, TOTAL:

  • Pays its pro-rata share of past gross costs of c. US$ 0.175 million
  • In addition to its pro-rata share, pays 21.4% of the past and future costs during the 2-year term of LO 16/27, subject to a gross cost cap of US$ 1.33 million
  • In the event that the JV partners agree to convert LO 16/27 into a Frontier Exploration Licence, and a subsequent decision is taken to drill an exploration well, TOTAL will pay 60% of the drilling costs, subject to a gross well cap of US$ 42 million
With the farm-in now completed, the revised equity in LO 16/27 is TOTAL (Operator - 50%), Providence (40%) and Sosina (10%).

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