Plummeting oil prices and internal boardroom upheaval have forced the London-listed Afren exploration company into administration.
Crisis management consultants from AlixPartners were brought in after Afren failed to find financial backers to meet a growing cash crisis at the firm, which produces oil in Nigeria and the Kurdistan region of Iraq.
“The board believes that all the possible routes have now been explored during the course of this process, which was subject to a strict timetable, driven by Afren plc’s short-term liquidity issues,” said Afren in a statement.
“These discussions have failed to deliver support for a revised refinancing and restructuring proposal that would result in Afren being able to pay its debts as they fall due.”
Afren first revealed in January that it was in desperate need of a $200m (£132m) cash injection as the international price of Brent crude fell from $115 a barrel to close to $45.
Its problems escalated with the suspension and later exit of Osman Shahenshah, its chief executive. Shahid Ullah, the chief operating officer, also left last year over the receipt of unauthorised payments.
Last month, Egbert Imomoh, the company’s founder and executive chairman, and four non-executive directors did not stand for re-election at the annual general meeting.
In a separate development, its larger rival BG reported a 65% slump in second-quarter net income to $429m. The company is in the middle of a planned takeover by Shell, which is expected to be completed early next year.
