Canadian exploration company Antrim Energy — which has assets in Irish waters — is reviewing its options, admitting “significant doubts” exist regarding the firm’s chances of survival.
The Toronto-headquartered firm — which has interests in the North Sea, the Porcupine Basin off the west coast of Ireland, and Africa — is in discussions with lenders to “relax certain requirements” relating to its ability to access restricted funds, to quantify any additional funding requirements and to reassess terms based on the original production profile.
At the start of this year, Antrim entered into a $30m (€22m) payment swap transaction — subject to a number of financial and operating covenants and restrictions on various cash balances.
In a statement, Antrim’s management admitted that it expects to be in breach of certain covenants and had “insufficient cumulative production to remove restrictions related to the use of proceeds from oil sales”.
Antrim is also braced for higher-than-expected capital costs relating to the completion of its chief North Sea project, the Causeway oil field, regarding which it is required to pump extra funds into a reserve account with its lender.
Failure to fund capital costs could result in the loss of the asset. Antrim’s options include the sale of assets and it is taking advice on that.
“There are a number of material uncertainties that raise significant doubts as to the company’s ability to continue as a going concern, including compliance with debt covenants; the performance of producing wells and related infrastructure; oil prices; ability to finish the planned development programme for Causeway within budget; ability to secure additional financing; relinquishment of commitments on certain licences and settlement of contingencies.”
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