Exploration company Providence Resources said it had terminated the farm-out agreement with SpotOn Energy for the Barryroe Licence off the Irish coast because key financing conditions were not met.

Providence said it will now lead the project development and funding arrangements.

The company said it is progressing arrangements for an alternative funding package to finance 100% of the costs of the early development scheme for the Barryroe license.

SpotOn Energy is a Norwegian company, registered in the UK, which takes a progressive approach to cost effective offshore oil and gas field development.

Providence's Barryroe project is the most advanced and appraised oil project offshore Ireland.

The company said that work to progress the funding solution is well advanced and is expected to be concluded before the end of the third quarter, in time to progress a 2022 drilling programme.

Providence CEO Alan Linn said that after actively supporting SpotOn over the past year, it is disappointing that it has become necessary to terminate the farm-out process with them.

But he said the company was looking forward and actively building a revised development partnership with key service providers and a financing package designed to meet the needs of the project.

"We have been encouraged by the support we are receiving from service providers and banks and the commitments being offered to work with us in progressing the project," Alan Linn said.

"We are currently working with key service providers to structure direct long-term partnerships on a risk/ reward basis and we are also in discussions with brokers to raise a Nordic bond," he added.

The Providence CEO said that the Barryroe early development scheme is an attractive investment which offers excellent returns, even in a low oil price environment.

"We look forward to completing the funding process and appreciate the support and patience of shareholders. The early development scheme will be of considerable benefit to the local economy and contribute to Ireland's energy security as we move towards a low carbon economy," he added,