Trading of the company’s AIM-listed shares was suspended after principal debt holders rejected a plan that would see the exchange of 100 percent of the outstanding bonds for 98.5 percent of the enlarged share capital of the company.

“The principal bondholders have informed the company that they are not satisfied that the transaction is capable of being implemented in a manner acceptable to them,” Xcite, which is developing the Bentley heavy oilfield in the East Shetland area, said in a statement.

A sharp drop in oil prices since mid-2014 has put severe pressure on energy companies’ balance sheets, forcing many to undergo restructuring.

Bond trustees are expected to petition the British Virgin Islands court within the next 10 days, requesting the appointment of a liquidator to the company “which is expected to take effect approximately four to six weeks from the filing of such request.”

Ian McLelland, global head of natural resources at Edison Investment Research, said that the announcement was a blow to both the company’s share and debt holders as well as to the British authorities.

“This is a big blow for everyone, and suggests that management could not broker a deal to sell its prized Bentley asset at pretty much any reasonable price,” McLelland said in a statement.

“Timing could not have been worse for the UK, as the newly independent Oil & Gas Authority (OGA) attempts to drive the industry towards Maximum Economic Recovery (MER). The Bentley field was one of OGA’s strategic priorities when it was formed, now its future is more uncertain than ever.”