(Alliance News) - Lansdowne Oil & Gas PLC on Friday provided an update on the arbitration process regarding the Barryroe lease undertaking application, saying if a decision is not awarded soon it could become a cash shell.
In May, Barryroe received a letter from the Irish Department of the Environment, Climate & Communications indicating that the Barryroe lease undertaking application would not be granted.
In June, Lansdowne's legal advisors, Ashurst LLP, submitted a letter requiring Ireland to participate in discussions, with a view to settling the dispute over Barryroe within three months.
A further letter was submitted by Ashurst on August 9 after no further communication was received from Ireland. A receipt of this letter was acknowledged by the Irish State Solicitors Office on Monday.
Lansdowne said its preferred solution remains to find an "amicable" settlement with Ireland, but added that, if necessary, it will pursue a legal remedy through a claim in arbitration.
On Friday, Lansdowne said that unless the decision not to award the Barryroe lease undertaking is revoked prior to the expiration of the three-month time frame, the company will become a cash shell from September 19.
As an AIM Rule 15 cash shell, the company is required to make an acquisition, or acquisitions, which constitutes a reverse takeover within six months of September 19.
Alternatively, within the same time period, the company can seek to become an investing company. This would requires the raising of at least GBP6 million and the publication of an admission document.
In the event that the Lansdowne does not complete a reverse takeover or seek re-admission as an investing company, its shares would be suspended from trading.
"The company continues to pursue an amicable resolution with Ireland; however, it remains steadfast in its belief of a positive award under the [energy charter treaty] should this avenue be followed. To this end, the company has continued its discussions with litigation funders who have expressed a willingness to engage once the statutory three-month window has passed, in the event a resolution is not reached," Chief Executive Steve Boldy said.
Lansdowne is a North Celtic Sea-focused oil and gas company. It has invested USD20 million in the Barryroe project.
Shares in the firm fell 4.8% to 0.10 pence on Friday afternoon in London.
By Heather Rydings, Alliance News senior economics reporter
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