Hurricane Energy, which focuses on retrieving oil from complex geological structures in the North Sea, proposed a debt restructuring including a debt-to-equity swap on April 30, as it fights for survival after downgrading its flagship field.

The plan effectively gives its creditors control of the company and the announcement drove its share price down to a record low of 1.39 pence.

“Current financial projections show we will not be in a position to repay our convertible bonds at maturity from Lancaster Field cash flows,” CEO Antony Maris said.

“We acknowledge that this proposed course of action entails significant dilution for our existing shareholders, but it marks an important and necessary step in the company’s efforts to secure a viable capital structure.”

Hurricane has entered a lock-up agreement with creditors holding 69% of its $230 million bonds due July 2022 which would see $50 million of debt converted to shares “comprising 95% of the fully diluted pro forma equity of the company immediately following the restructuring,” it said.

The remaining debt's maturity would be extended to December 2024.

Hurricane's shares were down 35% by 0806 GMT, slightly above the 1.39 pence hit earlier, giving it a market capitalization of around $64 million.

Last June, Robert Trice resigned as CEO after the company gave up its ambitions to produce 20,000 bbl/d. In September, Hurricane slashed reserves estimates at its flagship Lancaster Field.

Trice was a proponent of the so-called fractured basement method, which involves recovering oil from fractures in hard and brittle rock, which some see as a risky way to obtain crude.