Barryroe ditches €20m share sale in wake of permit refusal

Barryroe oil and gas field

Jon Ihle

Barryroe Offshore Energy has cancelled plans to raise up to €20m in working capital to fund exploration for fossil fuels off the Cork coast.

The company, formerly Providence Resources, said in a stock market announcement Thursday that it could no longer proceed with the share sale that was announced on April 6.

It said it was now in discussions with large shareholders regarding future funding.

Barryroe blamed the “surprising and extremely disappointing decision” by the Minister for the Environment Eamon Ryan to turn down its application for a permit to explore a prospect in a licence area 50km off the south-west coast.

The refusal and subsequent abandonment of its capital raising plans has put Barryroe in a difficult financial position, with the company warning that the disruption has “created going concern issues for the company”.

“The Company has very limited working capital and is engaging in discussions with its substantial shareholders in relation to potentially funding the Company going forward,” the company said in its statement.

“There can be no guarantee that these discussions will be successful such that additional funding will be secured in the near future.”

Barryroe is due to publish its annual accounts by June 30, but the company said the minister’s refusal and the delay to its fundraising plans will delay the publication.

The company said it is “considering all options” in relation to the decision and will update the market on further action and its financing situation as soon as possible. The company said last month that it hadn’t ruled out a legal challenge.

Mr Ryan turned down Barryroe’s permit application on May 19, creating conundrum for the company. Barryroe said the minister was not satisfied with the financial capability of the applicants.

The department said in a statement to the Irish Independent that its decision followed extensive engagement over several years between the applicants and its Geoscience Regulation Office in relation to the application.

The permit area is home to the Barryroe undersea prospect, discovered in 2012, and tipped by the company to hold potentially billions of euro worth of oil and gas.

Despite that promise Barryroe has struggled to turn the prospect into a reality and to secure financial backing to develop its plans.

Barryroe Offshore had an 80pc stake in the prospect licence alongside partner Lansdowne Oil & Gas.