Oil and gas explorer Sterling Resources has abandoned plans to sell more than £28million of new shares less than 48 hours after launching the fundraising effort.
The Toronto-listed firm, which has UK offices in Aberdeen and London, said it had not been able to raise the money and would look elsewhere for funds.
Sterling announced the new share placing earlier this week as part of efforts to cover anticipated capital costs between now and the middle of next year, believed to mostly relate to the delayed and over-budget Breagh development in the southern North Sea.
Sterling has a 30% stake in Breagh, which is operated by RWE Dea, but first gas has been put back from July 2012 to an estimate date at the end of March, with a chance this could slip to the end of May.
Costs have risen on the project from an original total of more than £400million to £623million.
Sterling temporarily suspended trading on its shares shortly after making the latest announcement, the third suspension this week.
In a statement, Sterling said: “While a number of existing and potential shareholders have expressed strong support (in the share placing), the company has been unable to raise sufficient funds on terms which the board considers to be acceptable.
“Sterling will therefore pursue alternative means of ensuring that the company is appropriately funded.”
The company said earlier this week it expected to cash in from the sale of offshore Romanian assets, a possible refinancing of a loan and revenue from production in the North Sea due to start next year, but at the time said it had no assurance those sources of funding would be available before it incurred costs on the Breagh development.
Sterling’s failed share placing followed a deal to sell a 65% stake in its Midia block in the Black Sea to ExxonMobil and OMV, agreed last month. Sterling is also selling parts of other blocks offshore Romania.