Iona Energy has appointed two administrators from FTI Consulting LLP, a global business advisory firm, as it enters into administration.
Namely, Chad Griffin and Lisa Rickelton of FTI Consulting LLP were appointed as joint administrators for Iona Energy Company (UK) plc and Iona UK Huntington Limited, both oil and gas exploration and production companies with assets in the UK North Sea.
Iona Energy Inc. (the Canadian parent of the Companies) announced on November 18, 2015 that a financial restructuring could not be completed following the decision by a proposed farm out partner not to proceed. This announcement also advised that since there was no reasonable prospect of obtaining alternative funding in the current commodity price environment and within the required timeframes, it was highly likely that insolvency procedures would be needed to protect the interests of all stakeholders to the companies.
The appointment of administrators has occurred following a period in which the companies’ business and assets have been marketed with a view to maximising value for all creditors, Iona said. This process continues in relation to certain licenses, in particular the Orlando field development, in the UK North Sea, and associated Kells Licence.
Chad Griffin, one of the Joint Administrators, said: “The administrations illustrate the significant challenges facing oil and gas companies in the current oil price environment. Throughout last year, and in particular over the last six weeks, there has been a great deal of work to maximise value for the Companies’stakeholders in difficult circumstances.
“I would like to express our gratitude to management, employees, suppliers, bondholders, regulators and other key stakeholders for their support during this time and as we work together to look to find a satisfactory solution for creditors.”
In relation to the companies’ licences, the administrators are assessing the feasibility of a range of potential transactions in connection with the Orlando project. Discussions continue with interested parties in this regard, Iona said.
Furthermore, the execution of a transaction to transfer the Trent and Tyne licences is anticipated imminently and discussions are progressing with a view to a potential transfer of the West Wick license in due course.
In addition, Iona says that a default notice has been served on one of the companies under the Huntington licence in terms of the joint operating agreement and arrangements are being made to withdraw from, or relinquish the companies’ other licenses.