Prax Group - Case Update

The administrators of the collapsed Prax Group have agreed the sale of its upstream unit, Prax Upstream Limited, to Serica Energy for $25.6 million, representing the first major asset sale in the insolvency proceedings.

Various Prax entities were placed into liquidation with Matthew Callaghan, Andrew Johnson, Joanne Hewitt-Schembri and Samuel Ballinger of FTI Consulting appointed as special managers, while Clare Boardman, Matthew Roe and Paul Meadows of Teneo were appointed joint administrators of their parent State Oil, in late June.

In August, joint administrators Teneo released their report outlining how “material irregularities” in the Prax Group’s £783 million loan facility contributed to its collapse, and revealing that they filed a claim against Winston Soosaipillai, the company’s owner, for allegedly breaching his fiduciary duties. There whereabouts of Mr Soosaipillai and his wife are unknown, and insiders speculate they have left the country.

The recent deal with Serica includes the Lancaster oilfield and stakes in the Greater Laggan Area (40%), Catcher field (10%), and Golden Eagle Area Development (5.21%), delivering immediate production and a new operated hub in the West of Shetland, while also unlocking substantial tax losses inherited from Prax. CEO Chris Cox described the transaction as a “great deal at a great price,” noting it strengthens the portfolio and near-term cashflows.

Read the announcement HERE.