Celtic Sea assets expire following Lansdowne Oil and Gas farm-out failure

Troubled Irish exploration firm Lansdowne Oil and Gas has been dealt a fresh blow with the announcement two of its exploration licences in the Celtic Sea have expired following failure to find farm-out partners to further develop the assets.

In a brief stock exchange statement, the company said “due to adverse industry conditions, attempts to farm-out SEL [standard exploration licence] 5/07, containing the Rosscarbery and SE Rosscarbery gas prospects, and SEL 5/08, containing the Amergin prospect, have been unsuccessful.

"As Lansdowne has not been able to demonstrate that drilling will be achieved in 2016, these licences have lapsed with effect from December 31, 2015.”

Most recent annual accounts for Lansdowne showed a 32% rise in losses to €1.8m in 2014.

The company was the last to physically drill in Irish waters but last August abandoned its Midleton well off the south coast after insufficient gas volumes were encountered.

Lansdowne’s chief asset is now its 20% stake in Providence’s Barryroe field.

Deemed by many to be the company’s lifeline, even this asset spells trouble now as evident from the recent passing by London’s Court of Appeal of a near $7m (€6m) bill (20% of which Lansdowne is liable for) relating to a long-running dispute with drill services firm Transocean.

Trading in both Lansdowne’s and Providence’s shares were suspended a fortnight ago and remain so. Lansdowne executives could not be contacted yesterday beyond their brief statement.

Providence remains in talks with its chief lender, Melody Finance, seeking to ensure appropriate financial resources are there to satisfy its obligations to Transocean.