Major shareholders in Barryroe Offshore Energy (BOE) were on Friday effectively given 24 days to decide whether to put money up to keep the company running, to pursue legal action against Minister for the Environment Eamon Ryan after he refused a permit on its key oil and gas prospect.
BOE said that it will hold an extraordinary general meeting (egm) on July 24th for investors to approve the appointment of a liquidator to wind the company down.
The company is known to remain in talks with major shareholders — including beef tycoon Larry Goodman and businessman Nick Furlong, who owns the Pageant Holdings investment vehicle — about the prospect of raising funds to keep BOE afloat. They have until the egm to commit such funds.
Backstop of €40m
The explorer’s move towards a so-called creditors voluntary liquidation comes after Mr Ryan’s department informed BOE in May 19th that it will not grant the company a so-called lease undertaking to continue work on its key Barryroe oil and gas prospect, 50km off the Cork coast, which was found more than a decade ago to have more than 300 million barrels of oil as well as gas resources.
Mr Goodman’s Vevan investment vehicle and other major shareholders had committed €40 million to cover the cost of the next phase of activity at Barryroe. This followed three development partnership deals reached in the past decade with outside parties coming to nothing.
However, the Minister’s decision was based on the applicant not meeting its “investment cover criterion” in guidelines for offshore oil and gas exploration applications. The non-mandatory guidelines, issued in 2019, say licence applicants should have net tangible assets of 3½ times the cost of planned work.
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That is a multiple of BOE’s net tangible assets, even including the committed €40 million backstop.
BOE and major shareholders have been weighing in recent weeks whether the company would be successful in pursuing a judicial review of Mr Ryan’s decision.
With time running out, BOE was forced to announce early last week its intention to wind down the business — if the talks with shareholders come to nothing before a planned egm on a creditors voluntary liquidation. Trading in its shares has been suspended, leaving its market value in London, as at £6.59 million (€7.64 million).
“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,” said BOE chairman Peter Newman in a statement last week.
