Hopes remain for Oilexco workers

The company is a subsidiary of Canadian group Oilexco Incorporated and employs about 100 staff at its two offices in Aberdeen – and offshore in the North Sea.

It is said to have been experiencing difficulties raising finance since the middle of last year.

Last week it emerged that the firm had run out of options after bankers refused further lending, making it the first North Sea casualty of the credit crunch.

Ernst & Young (E&Y) yesterday confirmed it had appointed Roy Bailey, Alan Bloom, Colin Dempster and Tom Burton as joint administrators. Dempster said he had already been approached by "several interested parties" with a view to purchasing the whole company or parts of it.

Industry experts have warned that small independent North Sea operators face acute difficulties as a result of the finance crisis and oil retreating sharply from last summer's highs of $147 a barrel to less than $50.

Last month's Ernst & Young Oil & Gas Eye, which monitors the value of oil companies on Aim, recorded a fall of 60 per cent since the start of 2008.

Alec Carstairs, oil and gas partner at E&Y, said at the time: "A number of junior oil and gas companies are finding it increasingly challenging to secure funding. Without cash, a company cannot progress from exploration activities to the production phase."

Oilexco currently produces about 16,000 barrels of oil per day, although that figure is set to rise to 30,000 barrels per day when other drilling activity comes on stream.

• Last Updated: 07 January 2009 8:41 PM
• Source: The Scotsman
• Location: Edinburgh

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