North Sea company Trap Oil said yesterday it could be force to sell assets to guarantee its survival beyond July.
The eight-year-old company warned in April that it may go bust and urgently needed a “viable funding solution”.
Yesterday, it said: “The company’s directors, in conjunction with the company’s advisers, are continuing to urgently assess a number of potential funding sources, including the potential disposal of certain of the group’s licence interests.”
London-based Trap added it was also in discussions with its principal creditors, shareholders and potential investors.
“No firm decisions or conclusions have yet been reached and there can be no certainty that a viable funding solution will be forthcoming,” it said, adding: “The directors continue to believe that, absent a viable funding solution, the company currently only has adequate working capital to support its activities until early July 2015.”
Trap is one of the once-ambitious new entrants to the market which emerged in much healthier times for the industry not so long ago.
Founded in 2007, it raised £60million when it floated on London’s Alternative Investment Market in April 2011.
After swooping to buy husband and wife-run Banchory firm Reach Oil and Gas for £30million it quickly embarked on a mission to become one of the most active explorers in the North Sea.
It also had ambitions to also become a producer, which it achieved with its “game-changing” £34.5million acquisition of a 15% stake in the Athena development in the outer Moray Firth from Dyas UK early in 2012.
But the firm was forced to part company with senior management last year, including founding duo Mark Groves Gidney and Paul Collins, in an attempt to reduce the wage bill after hefty losses.
The more recent plunge in oil prices has hit it hard and 2014 results showed pre-tax losses widened to £44.4million, from £10.3million the year before.
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