Barryroe Offshore Energy’s (BOE) efforts to raise emergency funds from large shareholders to keep the oil explorer afloat are set to come up short, with only days to go before an extraordinary general meeting (egm) on Monday to put the company into liquidation, according to sources.
BOE, which is running out of cash, has been seeking to secure fresh funds to keep the company running in order to pursue legal action against Minister for the Environment Eamon Ryan after he decided in May not to grant a permit for further work on the company’s key Barryroe oil and gas prospect off the Cork coast.
There are currently no discussions going on between the major shareholders to come together as a group to provide new funds, according to sources with knowledge of the matter.
There continues to be lingering, if declining, speculation, however, that beef tycoon Larry Goodman, who owns almost 20 per cent of the company, may step up before the egm on Monday morning to provide finance for BOE to effectively be run as a litigation vehicle to pursue a judicial review of the Minister’s decision.
David Swinburne, a chartered accountant and partner with Cork-based law firm FitzGerald Legal and Advisory, is being lined up as liquidator to BOE if fresh finance is not committed before the meeting.
BOE chief executive, Alan Curran, did not respond to an effort to secure comment, while a spokesman for Mr Goodman declined to comment.
“I think it’s over at this stage,” said one of BOE’s 10 largest shareholders, who declined to be identified.
Another major shareholder said: “There are no discussions going on now between shareholders on funding.”
BOE has burned through more than €270 million of cash that has been raised from share placings over the past 12 years. Barryroe was 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.
[ Barryroe disputes that Ryan’s officials ‘engaged extensively’ on oil fieldOpens in new window ]
Mr Goodman’s Vevan vehicle moved last November to provide a €40 million funding backstop for the Barryroe project, after Mr Ryan’s department expressed concerns about BOE’s ability to fund the next stage of work on the field while officials considered an application for a crucial permit, known as lease undertaking.
Vevan subsequently allowed other major BOE shareholders, including businessman Nick Furlong’s Pageant Holdings and UK hedge fund Kite Lake, to participate in the funding line.
The Minister, however, relied on a criterion in non-mandatory guidelines issued by his department in 2019 – that licence applicants should have net tangible assets of 3½ times the cost of planned works – to refuse the permit.
The company had negative net assets as of June 2022, after exploration and evaluation assets were stripped out.
UK-based Lansdowne Oil and Gas has a 20 per cent stake in the Barryroe project and is planning to pursue a multimillion-dollar compensation case against the State over Mr Ryan’s decision under an international arbitration facility. As a domestic company, BOE does not have recourse to this route.
BOE’s 80 per cent interest is held through a subsidiary called Exola, which was the operator of the licence. Industry observers suggest that Exola might attract bids in the event of the wider group going into liquidation – from parties willing to take on judicial review proceedings against the Government over the permit decision.
