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2.What has the Company done to get funding and avoid this situation?

The Company has sought to attract a field partner and funding for the development of the Bentley field and repayment of the Bonds, for a number of years.  Over that period, the Company has been engaged in processes with a wide range of parties, including major and independent oil companies, private equity backed groups and international entities to attract the funding required, however, while technical diligence was completed on a number of occasions, no funded development proposals or offers were received by the Company.

The Company evolved its strategy over this period to adapt to the changing market environment and position the Bentley development as an attractive project for investment.  At the Company’s request, the OGA conducted and expressed itself content with a technical review of the development scenario, proposed subsurface work and well placement plan for the first phase of the Bentley field development plan, but noted that more work was required on the commercial model.  The Company also participated in numerous third party due diligence exercises, whilst optimising the overall development plan to reduce the unescalated, full lifecycle costs to approximately $30 per barrel and also reduced the amount of upfront capital required for the project.

Although the Company has remained engaged with potential funders and partners, the significant decline in the price of oil experienced since the second half of 2014 has had a substantial, negative impact on the availability of capital for investment into major, new development projects and the UK North Sea in particular.  The negative sentiment caused by this long term, structurally low oil price environment has had a major effect on the Company, which has been unable to raise the necessary capital to fund the Bentley development and repay the Bonds ahead of their maturity.

Published : Monday, November 28, 2016 5:52 PM UTC