Barryroe Offshore Energy PLC (AIM:BEY, OTC:PVDRF) has confirmed that it can no longer proceed with its previously announced equity raise, which would’ve resulted in a €20mln injection of capital.
The Irish oil company is now discussing the possibility of raising working capital from its substantial shareholders and directors in order to maintain the company in the near term.
Currently, it said it has €176,000 (£152,000) of working capital remaining, amounting to approximately three weeks of working capital.
It comes as the company and its partners consider their options in response to a decision by the Irish government that last month resulted in the termination of the offshore licence covering its principal asset, the Barryroe oil field development project.
In today’s statement, the company described the government’s decision as “surprising and extremely disappointing”.
The decision was made by Eamon Ryan, Minister for Environment, Climate and Communications in Ireland’s coalition government. Ryan is also the leader of the Green Party in Ireland.
A letter sent by Ryan claimed that he was “not satisfied with the financial capability of the applicants” as Barryroe Offshore Energy and its partners applied to extend the licence term, in order to proceed with a phase of appraisal work that promised to bring the project closer to development, and ultimately towards production.
Ryan's department claimed via the Irish media that energy policy was not the reason for the decision.
According to the Barryroe development plans, Phase 1A and Phase 1B of the project would be host to between 52mln and 109mln barrels of crude. These domestic barrels of crude oil are potentially significant in a country that is a net importer of fuel and which, outside of Dublin, still largely relies on heating oil to heat its homes.
Today, Barryoe Offshore Energy told investors it now has “very limited working capital” and it is engaging with its substantial shareholders in relation to potentially funding the company going forward.
“There can be no guarantee that these discussions will be successful such that additional funding will be secured in the near future,” it said in a stock market statement.
Moreover, the company noted that its financial results reporting, for the year ended 31 December 2022, will be delayed and as a result trading in its shares may be suspended in due course.
The company added: “The refusal by the Minister to grant the Lease Undertaking and the consequential delay to the proposed working capital raise has created going concern issues for the Company that will delay the publication of its annual accounts.
“The company is considering all options in relation to the decision by the Minister to refuse to grant the Lease Undertaking over SEL 1/11.
“It will update the market on this and its financing situation as soon as practicable.”