Troubled oil and gas company Petroceltic has confirmed it has been given more breathing by its banks today as it continues its search for a buyer.
The publicly quoted exploration company is in breach of its senior bank facilities, but has received a number of waivers on loan repayments from its lenders. The latest waiver, which expired on Friday, has been extended until the end of the month.
The Irish group, which has debts of $217.8 million (€199 million), announced a surprise strategic review of its business just before Christmas, admitting in a December 23rd statement that it “does not have certainty on liquidity beyond early January 2016”.
Petroceltic said in a statement on Monday its syndicate of banks was willing to continue to support the company for the period of the review, which may result in the sale of the group, the sale of specific assets within it or a more negative outcome should a buyer or buyers fail to be found.
Restructuring specialists
UK-based restructuring specialists at PricewaterhouseCoopers, led by partner Ian Green, have already been working with the company for about six months.
Petroceltic declined to comment yesterday on a report in the Sunday Telegraph that suggested PwC was helping the group prepare for “possible administration” given the perilous state of its finances.
In December, it said it had received a number of conditional proposals and expressions of interest in some of its production and exploration assets and, under Irish takeover rules, the company is now in an offer period.
The group has oil and gas assets in Algeria, Egypt, Italy and Greece, including the Ain Tsila gas field in Algeria, which the directors believe to be “the principal driver of the long-term future value of the business”.
However, Petroceltic, whose chief executive is Brian Ó Cáthain, has been hit by a collapse in the price of oil, with its shares shedding 77 per cent of their value in 2015, a year that “presented a period of exceptionally challenging market conditions”, it said.
Crude oil prices have remained under severe pressure in 2016 amid supply glut concerns, proving potentially disastrous for smaller exploration companies like Petroceltic that rely on large sums of external funding to develop projects.
The company has also had a long-running battle with Swiss-based investment fund Worldview, which holds 30 per cent of its equity and has sought to remove management and restrict the powers of the directors.
That dispute has limited the exploration group’s potential to raise funds in the market.
