Written by: Keith Tully
Published: 7th June 2016
Administrators have been appointed to manage the affairs of a Scottish oil and gas sector services group called SeaEnergy after cash flow problems took their toll on its businesses and operations.
According to the appointed administrators, SeaEnergy came to be increasingly short of cash towards the end of 2015 as a result of the international oil price decline and the impact this trend has had on operators within the UK’s energy industry.
“As seen throughout the industry, client orders were cancelled or postponed, and the number of new business enquiries reduced significantly,” a recent statement from SeaEnergy’s administrators at KPMG explained.
Despite having succeeded in securing a £1 million working capital loan in November of last year, SeaEnergy’s directors were unable to put their group back onto a stable financial footing as trading conditions within their industry continued to deteriorate in the early months of 2016.
In March, SeaEnergy issued a statement to the stock exchange informing investors that it has been making significant losses, was trying to sell its assets to raise funds and may not be in a position to continue trading beyond May of this year.
“The loan facilities announced in November 2015, which were intended to bridge the gap to improved trading conditions, have proved to be insufficient and the company's cash position is becoming constrained,” a statement from the company said at that time.
“Any short term improvement in performance would require a rapid upturn in the oil and gas market,” it said.
Unfortunately for SeaEnergy, that upturn has not been in evidence in recent weeks and administrators are now in the process of trying to maximise value for creditors from the group’s saleable assets.
The two primary businesses operated by the Aberdeenshire-based group are Return to Scene Limited (R2S) and SE Innovation Limited (SEIL), both of which provide asset management software services to energy sector operators.
Other assets owned by SeaEnergy include royalty interests relating to oil and gas exploration fields in the UK.
Various assets and employees of SEIL have been transferred to R2S in recent days with the former SeaEnergy business being acquired soon after by a company called James Fisher Holdings.
“We are pleased to have concluded the sale of R2S to James Fisher, which will safeguard the majority of jobs within the group, maintain customer service, and provide the best outcome for SeaEnergy’s creditors,” said one of KPMG’s appointed administrators in a recent statement.