Barryroe Offshore Energy (BOE) confirmed on Monday that its main shareholder, businessman Larry Goodman, has reached a rescue investment agreement with the oil explorer’s examiner, which would see the billionaire inject as much as €6.35 million of funding and take full control of the company.
Mr Goodman’s Lorsden (Jersey) Limited vehicle, based in Jersey, has committed to invest €1.05 million of equity in BOE on condition that all existing shares are cancelled. It would also lend BOE a further €300,000 “to enable the company to fully explore the restructuring options available to it”.
In addition, Lorsen will make a further €5 million available “upon agreement of an appropriate business plan, to be supplemented in due course by substantial additional funds as required to invest in future business plan prospects”. Lorsen is the parent company of Mr Goodman’s Vevan Unlimited vehicle, which owns about 20 per cent of BOE.
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Full details of the rescue plan – or scheme of arrangement – will be finalised later this week and sent to BOE shareholders and creditors. Major shareholders include businessman Nick Furlong, who owns almost 13 per cent, mostly held through his Pageant Holdings investment company, and UK hedge fund Kite Lake Capital, which owns more than 10 per cent.
Kieran Wallace of corporate advisory firm Interpath Ireland was appointed as examiner of BOE in late July following an application by Mr Goodman’s Vevan vehicle. The move came just days before shareholders were due to vote on putting the company into liquidation after Minister for the Environment Eamon Ryan refused in May to grant a permit for its key Barryroe oil project off the Cork coast.
The beef tycoon’s bid is centred on the possibility that the oil and gas explorer could move its focus to green energy projects, according to an independent expert’s report that was filed in tandem with the examinership petition.
BOE, which is insolvent, had been seeking in the wake of the Minister’s decision in May to secure fresh funds from big shareholders to keep the company running in order to pursue a legal case – by way of a judicial review – against the Government. However, this came to nothing and the company was heading towards liquidation before Mr Goodman made his move.
The independent expert’s report did not explore the potential for legal action, with its attendant risks. However, the report, written by Damien Murran, head of Teneo Ireland’s corporate restructuring practice, said an examiner could explore “what recourse [if any] the company may have regarding existing or expired exploration licences”.
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BOE traces its roots back to 1981, when businessman Sir Anthony O’Reilly and a group of investors set up Atlantic Resources to pursue opportunities at a time of heightened speculation about oil and gas resources off Irish shores.
BOE has burned through more than €270 million of cash raised from share placings over the past 12 years. Barryroe was the last remaining exploration hope. The prospect, 50km off the Cork coast, was found more than a decade ago to have more than 300 million barrels of oil as well as gas resources. BOE saw three development partnership deals fall through over the period.
BOE’s shares were suspended before it succumbed to examinership. It is expected that it will be delisted on completion of the rescue plan.
The board of the company, led by chairman Paul Newman, will stand down “as soon as practicable” following implementation of the plan, BOE said. The company’s chief financial officer, Colin Christie, has left the company, it added.
