The legal writ to wind-up Xcite Energy is a major psychological blow to both investor and regulator confidence in the ageing N. Sea oil basin.
Ian McLelland, Global Head of Natural Resources at Edison Investment Research, commented: “Following the previously announced debt for equity swap, Xcite’s existing share-holders were always going to lose almost everything, retaining only 1.5% of the equity value in the event the deal went through.
“Xcite’s bond-holders, however, had a choice and appear to have gone down the route of cutting their losses rather than taking control of the company.
“This is a big blow for everyone, and suggests that management could not broker a deal to sell its prized Bentley asset at pretty much any reasonable price.
“Timing could not have been worse for the UK, as the newly-independent Oil & Gas Authority (OGA) attempts to drive the industry towards Maximum Economic Recovery (MER).
“The Bentley field was one of OGA’s strategic priorities when it was formed, now its future is more uncertain than ever.
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Despite sitting on a ‘development-ready’ $2.5bn N. Sea oil field, Xcite Energy shares are suspended as bond holders petition for winding-up over $139m
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