London-listed Max Petroleum has entered a formal sale process as it bids to turn around the cash-strapped company with job cuts and cost-cutting.
The Kazakh-focused explorer said the process being run by Blackstone Group International Partners could look at a corporate merger, acquisition or new investor as well as a sale of the business or a farm down or disposal of assets.
Max Petroleum also warned of stiff impairments on the way in its annual results for the 12 months to 31 March that will be announced next month.
The company will wipe $64.6 million off the capitalized value of its post-salt assets to reflect “limited exploration potential” based on the latest independent reserve report.
It may also cut up to $113 million off the value of its pre-salt assets, although a final decision has not yet been taken on this write-down.
The explorer would need another $20 million to $25 million to finish its aborted Nur-1 deep well that ran into operational troubles this time two years ago and caused Max’s share price to collapse, and the exploration phase of its blocks A&E licence runs out next March.
In May the explorer said it was creating a $3.8 million severance fund for plans to cut an unspecified number of jobs by closing its Houston office and downsizing staffing in London and Kazakhstan.
The Kazakh-focused company first flagged plans in late January to reorganise its cost structure to help it enter development and production after talks on new financing ended without a deal.
The explorer said it had already chopped general and administrative costs by more than 30% to save around $4 million a year.
Shares in the AIM-listed company were trading up 3% at around £0.01 on Wednesday morning having sold for £0.15 three years ago before the well trouble.