Oil company Xcite Energy heading for liquidation
Shares in North Sea oil company Xcite Energy were suspended today after crunch talks with its bondholders broke down.
The firm, which had been in discussions to hand 98.5 per cent of its shares to lenders, now looks set to be liquidated following the move.
Xcite, which has its operational headquarters in Aberdeen, said its principal bondholders had told it that they were “not satisfied that the transaction is capable of being implemented in a manner acceptable to them”.
It added: “On this basis, they expect to instruct the bond trustee to petition the court in the British Virgin Islands within the next ten days requesting the appointment of a liquidator to the company, which is expected to take effect approximately four to six weeks from the filing of such request.”
Xcite said that liquidation was unlikely to result in the return of any value to its existing shareholders, and its shares were suspended from trading on London’s Alternative Investment Market.
The company, owner of the Bentley field about 100 miles east of Shetland, said in June that its bondholders had given it some breathing space by agreeing to extend the repayment of the bonds by three months while talks continued with the aim of resolving terms for a restructuring of $135 million (£110m) in debt. The bonds were issued by its subsidiary, Xcite Energy Resources (XER), in June 2014.
Xcite said that XER and its assets were not expected to be the subject of enforcement action and the subsidiary was expected to remain a going concern throughout the liquidation process.
The Bentley field, discovered in 1977, is estimated to contain recoverable reserves of some 267 million barrels, making it one of the largest undeveloped oilfields in UK waters.