Barryroe is refused lease to drill for oil and gas off the Cork coast

Minister Eamon Ryan said he was not satisfied with the financial capability of the applicants.

Barryroe Offshore Energy said it could have commenced drilling operations next year if the Lease Undertaking was granted. Picture: Finbarr O'Rourke

Oil and gas exploration firm Barryroe's application for a lease to continue drilling operations off Ireland's south west coast has been turned down.

In a statement, Barryroe Offshore Energy said it received a letter on Friday from Minister for the Environment Eamon Ryan that he was not satisfied with the financial capability of the applicants.

Legislation requires Lease Undertaking applicants to have a tangible net worth that is 3.5 times the total financial commitments.

Barryroe said it is considering its response to the contents of the letter. They said from a technical perspective the application was satisfactory.

The decision is a further setback to Barryroe's long-running attempt to access oil and gas reserves off the Irish coast.

In an update in November, Barryroe's CEO Alan Curran said the company had secured €40m in new funding from Larry Goodman’s Veven Unlimited to allow it to proceed to the next phase of drilling off the Cork coast and confirmed it had submitted additional information regarding the new funding to the Department.

If the Lease Undertaking was granted, Curran said they would have moved rapidly to commence preparations for drilling operations in 2024.

In response to the decision, Davy analyst Colin Grant said the letter from the Minister is disappointing but also not surprising given its stance on energy policy.

"Smaller equity funded companies only ever raise 1x the capital that is required for their financial commitments and do not raise 3.5x this amount," he said in a note. "Therefore, no small oil and gas or resources stock could ever meet this criterion no matter how valuable or strategically important its assets might be."