Swedish oil explorer PA Resources has had its application for corporate reorganisation approved.
The company had previously announced that it would be making the move after summoning a new bondholders meeting earlier this week.
PA Resources said a further request was made for deferral of interest in respect of payments until the end of April.
It followed a “perceived lack of progress” in negotiations with creditors.
The board of directors was also “no longer confident” in the ability to reach an agreement.
A spokesman said: “In light of this, the Company’s board of directors has decided to seek protection from creditors by filing an application to the Stockholm District Court for a company reorganisation.
“The purpose of the application for the company reorganisation is to provide flexibility to enable the company to achieve an effective restructuring solution for its stakeholders.
“The board of directors continues to believe that a long term financing plan can be agreed.
“The company reorganisation process will only include PA Resources AB and not its subsidiaries.
“The company will continue to trade during the reorganisation and the reorganisation is not expected to impact the operations in its subsidiaries.”
The District Court in Stockholm appointed lawyer Lars Soderqvist of the law firm Hokerberg & Soderqvist Advokatbyra KB as administrator as suggested by the company.
Last year the value of the firm dropped by more than 40% after the company had called on holders of bonds worth £130million to allow it to delay payment interests due in late September and early October until 2015.
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