Canadian oil exploration firm Oilexco could be sold, it emerged yesterday.
Just last month, the North Sea firm insisted it was not on the market.
However, a weekend report said Oilexco had been put up for sale and investment banker Morgan Stanley had already received interest from larger rivals BG Group, Talisman Energy and Petro-Canada.
Maersk Oil was also said to be mulling over a bid.
Oilexco declined to comment yesterday, but a source close to the company said that a sale was just one of a number of options.
He added that financing was still the preferred option, possibly through mezzanine debt or alternative sources of capital.
Shares in Oilexco closed on Friday at 72p – only a fraction of its 52-week high of 964p.
The company’s shares plunged more than 24% on Thursday, November 20, after it announced plans to raise up to £100million in debt and sell shares to raise more cash, but later said it had abandoned the proposals.
Oilexco also said it had hired Morgan Stanley to advise it on strategic alternatives.
The company said its board cancelled the plan to issue stock and debt because, in the current market conditions, the proposed offering was too dilutive to shareholders and did not reflect the value of its assets.
Oilexco spokesman Rob Elgie said at the time that Morgan Stanley’s hiring did not mean the company had put itself up on the block.
He added: “We are not for sale. We are not shopping the company around.”
In October, Oilexco cut its production target by nearly 25% 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 45,000barrels.
Oilexco said in October it was reviewing the timing of its development programmes as a result of the North Sea delays, which 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, in the central North Sea, has been affected by the late arrival of the Sevan Voyager floating production vessel.
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