Canadian oil explorer Oilexco has cut its production target by nearly a quarter following delays at its UK North Sea operations.
The Calgary-based company now expects to reach total output of 35,000 barrels-per-day by the end of the year, or the first quarter of 2009.
It had previously said it expected to finish the year producing 45,000 barrels-per-day.
Oilexco said it was reviewing its development problem as a result of the North Sea delays, which have forced the start of production from the Shelley field to be pushed back to December, and difficult weather.
The timing for the first well from Shelley, which is in the central North Sea, has been affected by the late arrival of the Sevan Voyager floating production storage and offloading vessel. It is now scheduled to be floated to location in mid-November.
Oilexco also revealed that a planned refinancing has been delayed by the international credit crisis.
The firm announced in July that its Oilexco North Sea subsidiary had signed an agreement with the Royal Bank of Scotland to increase its credit line to about £500million.
Oilexco said the new arrangement, providing access to an extra £150million, would be used for developing new fields, purchasing equipment, giving protection against cost over-runs and potential decommissioning liabilities, and general corporate purposes.
The deal is taking longer than expected to conclude, however and the oil company is now looking at alternative financing options.
Announcing the delay, Oilexco blamed “unprecedented” liquidity and volatility issues facing the credit markets.
It added: “Given that Oilexco is fully funded for the remainder of its 2008 capital programme and has strong cashflow, because of its current production base, the company feels it is prudent to actively monitor and where necessary review the refinancing process.”
Oilexco said it continued to make good progress on other key operational activities, with drilling having got under way at both the Nicol and Caledonia fields in the central North sea.
The company added it had also successfully completed production optimisation work on the Balmoral floating production vessel.
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