The cash-strapped oil and gas company, Rathlin Energy, has won more time to secure funds to meet its drilling commitments.

The company’s annual accounts, published this week, show that Rathlin had a working capital balance of just over £800,000 at the end of the financial year (December 2024).

But the estimated cost to Rathlin in 2024 of developing wells at the West Newton sites in East Yorkshire was £9m. The company also had to find its share of about £1.7m to abandon the wells.

The accounts commented:

“It was clear that the logistics and funding of all of these initiatives in 2024 would prove to be a significant challenge.”

The industry regulator, the North Sea Transition Authority (NSTA) agreed in June 2024 to extend the deadline for work at West Newton until 2026 and 2027.

This is not the first time timescales at the field have been extended.

Last year, DrillOrDrop reported that the West Newton field had seen more than 15 years of delays, missed deadlines and changing plans. In this time, there has been no formal hydrocarbon extraction and there have ben problems including permit breaches, formation damage, protests, a missed target reservoir and ongoing shortage of money.

The NSTA’s revised deadlines are:

• 30 June 2026 to re-enter, recomplete or sidetrack an existing well
• 30 June 2027 to re-enter and recomplete or sidetrack an additional well or drill and complete a new deviated or horizontal well
• 30 June 2027 to produce a West Newton field development plan
• 30 July 2027 to abandon the West Newton wells

The accounts also report that Rathlin got a £2.5m short-term loan in April 2025 from its major shareholder, Reabold Resources, to fund work in 2025.

They said postponing the work commitments and the loan from Reabold “brought some relief” to the company’s immediate cash flow requirements.

But they confirmed:

“funding for the NSTA commitments remains uncertain”.

The accounts also said:

“the Company requires a longer-term financing solution to allow it to meet its commitments to the NSTA”.

They said Rathlin continued to look for “an investment into the licence or the Company to ensure the Company can progress the West Newton play within the timelines required by the NSTA”.

They also said

“at the date of approval of these financial statements, there are no binding agreements in place to finance the Company’s NSTA commitments.

“Accordingly, this indicates the existence of a material uncertainty which may cast significant doubt on the Company’s ability to continue as a going concern, and therefore, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.”

If funding were found, the West Newton-A2 well is likely to be recompleted first to further test the Kirkham Abbey Formation, the accounts said.

After analysing the results, Rathlin would drill a new well at West Newton A targeting the Kirkham Abbey Formation.

Bringing a single well into production at the site “may be appealing to parties considering a potential farm-in or other financing option on the West Newton play”, the accounts added.

Key figures

Comprehensive loss for the year: £804,219 (2023 £851,286)

Total assets: £22,934,584

Total liabilities: £1,816,134

Cash at beginning of year: £2,228,151(2023 £3,624,299)

Unrestricted cash at end of year: £723,270 (2023 2,228,151)

Restricted cash at end of year: £319,500 (2023 £150,000)

Number of staff: 6 (2023 7)

Remuneration of directors and staff: £234,633 (2023 £218,558)