Canadian firm Iona Energy, which holds a 15pc stake in the 30,000 b/d of oil equivalent (boe/d) Huntington oil and gas field in the UK North Sea, has entered insolvency.
This is the second setback for Huntington stakeholders in November. Norwegian upstream independent Noreco may have to forfeit its 20pc stake after failing to pay for its share of the costs.
Huntington's remaining shareholders are German utility Eon's upstream arm, which operates Huntington with a 25pc stake, and London-listed independent Premier Oil with a 40pc interest.
Iona said insolvency procedures will begin at its two UK subsidiaries after an attempt to sell 25pc of the Orlando North Sea crude project was scuppered. Iona said the deal's proposed counterparty, "a global energy company, has elected to restrict capital allocation to its upstream operations" and therefore the sale will not be completed. Iona said it cannot finance its share of capital expenditure at Orlando, from where first oil was expected by the end of 2016. Huntington was Iona's sole producing asset.
"Despite tireless, collaborative and innovative work by the Iona team and suppliers to effect the restructuring, we have not been able to overcome the severe difficulties in today's oil and gas environment," said Ioan chief executive Tom Reynolds. Iona's shares, which trade on the Toronto stock exchange, will be suspended. Iona said it is unlikely that the insolvency process will result in any residual value being made available to its shareholders.
