Barryroe Offshore Energy has axed plans to raise €20 million following what it called the Minister for the Environment Eamon Ryan’s “surprising” refusal to allow it continue drilling for oil off the Cork coast, a move it says raises going-concern issues for the company.
Mr Ryan recently refused to extend a lease undertaking to Barryroe’s allowing it to drill an area 50km off the south coast calculated to contain at least 278 million barrels of oil.
Barryroe said on Thursday that as a consequence of Mr Ryan’s “surprising and extremely disappointing decision” it would not proceed to raise €20 million in working capital from shareholders, a plan it announced on April 6th.
“The refusal by the Minister to grant the lease undertaking and the consequential delay to the proposed working capital raise has created going-concern issues for the company that will delay the publication of its annual accounts,” Barryroe added.
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Stock-market rules require the oil and gas explorer to publish its accounts for 2022 by June 30th.
Barryroe confirmed that it was in talks with its substantial shareholders, which include businessman Larry Goodman’s Vevan Unlimited company, which the statement did not name, about funding the company.
“There can be no guarantee that these discussions will be successful such that additional funding will be secured in the near future,” the company cautioned.
Mr Ryan’s department denied last month that the Green Party leader refused to extend the lease because of the Government’s long-term policy aim of ending fossil fuel dependency.
Instead officials told the company that the Minister refused its application as it did not comply with guidelines requiring businesses seeking such leases to have net tangible assets of 3.5 times the likely cost of the planned work.
Analysts point out that it’s rare for small oil and gas explorers to have anything like those resources. The guidelines, issued in 2019, allow the department “absolute discretion” to depart from their requirements.
London-based Lansdowne Resources, which owns 20 per cent of the Barryroe field, plans to go to arbitration under the Energy Charter Treaty, to which the Republic and UK are signatories.
This option is not open to Barryroe Offshore Energy as it is a domestic company, so cannot take a claim against the Government under an international treaty.
The firm has consulted with lawyers A&L Goodbody. Legal avenues could include a judicial review, where a High Court judge scrutinises Mr Ryan’s decision and potentially quashes it.
