Barryroe Offshore Energy has suspended trading in its shares and announced its intention to wind down the business after discontinuing a plan to raise €20 million in working capital 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.
The country has “lost an opportunity” to improve its energy security and reduce emissions associated with importing oil, the company’s chairman said in a statement, after trading in Barryroe’s shares was suspended in Dublin and London, pending the outcome of an extraordinary general meeting (EGM) to appoint a liquidator.
In an update on June 8th, Barryroe said it had €176,000 of working capital left, enough to continue operations for another three weeks, after the Minister refused to extend a lease undertaking to the company, allowing it to drill an area 50 kilometres off the south coast calculated to contain at least 278 million barrels of oil.
On Monday, however, the company said that it intends to initiate an “orderly wind down of the business through a creditors voluntary liquidation”.
While it said that it will pursue funding solutions up to the date of the EGM in July, Barryroe said there was no guarantee that these discussions would be successful.
The company said that it will suspend trading in its ordinary shares on London’s AIM and the Euronext Growth markets from Monday morning. Trading will remain suspended until the funding situation is resolved or the liquidation is complete, “in which case the admission of the company’s shares will be cancelled”.
Aimed at allaying concerns at the Department of the Environment about Barryroe’s ability to finance drilling at the site, the company secured €40 million in funding from beef magnate Larry Goodman last November. In May, however, the Minister informed Barryroe of his decision to decline the 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.
Thanking shareholders for their support, Barryroe’s chairman, Peter Newman, said in a statement on Monday that it has been “a disappointing and deeply frustrating time” for the company.
[ Barryroe axes €20m fundraising plan after ‘surprising’ licence refusalOpens in new window ]
“The funding solution put in place in November 2022 secured €40 million held on deposit in escrow, ready to drawdown as needed, sufficient to fully cover the costs of the proposed appraisal programme,” he said. “Notwithstanding that secured funding, in assessing the company’s financial capability to deliver this commitment, the Minister has seen fit to apply his discretion, relying on reference to one, non-mandatory ‘financial capability guideline’, arguably inconsistent with the limited scope of the work, thereby denying all efforts to progress appraisal of the Barryroe oil and gasfield.
“In consequence, the country has lost an opportunity to improve Ireland’s energy security, to reduce the emissions associated with importing oil and gas, to provide employment and future tax revenues and to diversify the country’s sources of primary energy supply. All at no cost to the public purse.”
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.
