Fastnet has reported an impairment charge of $36.6 million (€32.8m) arising from its decision to abandon its oil and gas activities off the coasts of Ireland and Morocco and switch to the biopharma sector.

The Dublin and London-listed company, which is chaired by one of the founding directors of Merrion Corporate Finance, Cathal Friel, said last month the decision to abandon the exploration sector flowed from the worldwide decline in energy prices and the associated adverse sentiment towards small cap oil and gas concerns.

In an end-of-year financial statement issued on Friday the company confirmed its intention to seek investment opportunities in the biopharma sector.

“In light of the current economic climate within the oil and gas sector the board determined that it was not in the best interests of shareholders to either pursue M&A opportunities within the oil and gas sector or to expend further resources on the company’s existing oil and gas assets,” it said.

“The board believes that the healthcare industry, particularly the biopharma sector, is experiencing strong momentum and there exist significant M&A and value creation opportunities for both small cap and large cap companies. Furthermore the board believes that it has access to an international pipeline of such opportunities that could lead to value creation for shareholders. The sector is experiencing high activity levels in the UK and also in Ireland, a country where the company has an existing operating base, with the required management, commercial, fiscal, operational and technical expertise all located in the Irish market,” it added.

Fastnet said the move away from the exploration sector would lead to an impairment charge of $36.6 million due to its decision to surrender exploration licences.

"The company believes that sufficient information was available at the reporting date (low oil prices, inability to farm out assets, significantly depressed share price below cash value, expiring or expired licensing options, disappointing exploration results in the company's areas of interest) which suggested that the recovery of expenditure on the Moroccan and Celtic Sea areas of interest was unlikely, therefore the amounts which were capitalised in respect of these assets were written off to the statement of comprehensive income," the company said.

The company said it had cash reserves of $15.9 million at the end of July. It also said it reduced general and admin costs by more than 40 per cent to $1.9 million between December and March.

Fastnet, which has offices in Dublin and London, began trading on the AIM and ESM markets in June 2012, when it raised €10 million. Following a general meeting last week at which shareholders voted to approve the decision to switch industry focus, the company name changed from Fastnet Oil and Gas to Fastnet Equity.