Fairfield backers agree to £96m funding plan as McAllister quits

SHAREHOLDERS at Aberdeen-based oil and gas firm Fairfield Energy have agreed a £96 million investment package, effectively ruling out a near-term revival of its plans to float on the stock exchange.

Chief executive Mark McAllister has also resigned from his role at the company following a strategic review launched in the wake of last summer's postponement of a 600m flotation blamed on market conditions.

Former chairman Chris Wright will replace him and senior independent director Ron Emerson will move up to become chairman.

The company said the review had led to a "focused and robust" business plan which will drive greater value from its "exciting" North Sea asset base.

Existing investors, mainly private equity backers, have agreed in principle that the additional funding will be provided to back the plan.

Emerson said the backing demonstrated "the strength of the business and its clear potential".

"With a number of changes at board level, we are also ensuring that we have the right team in place to execute this next stage of the plan."

Emerson also thanked McAllister - who will continue to act as an adviser to the company - for his contribution over the past five years.

"He has played a critical role in making Fairfield what it is today and we look forward to his ongoing contribution to the company and to the industry in general," Emerson said.

A spokesman for the company said that the financing agreement meant the firm had sufficient funds in the near term and that there were no current plans to look at an initial pubic offering (IPO) again but it may be something revisited in the longer term.

Fairfield had hoped to raise some 337m from last year's IPO to boost production from its assets.

Wright joined Fairfield in 2005 after senior roles with Houston-based Unocal and Lasmo in London. He previously spent more than 20 years with BP.

Fairfield has four producing fields - Dunlin, Dunlin SW, Osprey and Merlin - which it bought from Shell two years ago. It also has interests in various other North Sea fields, as well as the Clipper South field off the coast of England.

Ahead of the planned flotation the company said it planned to boost production from 4,600 barrels of oil equivalent per day in 2009 to 34,400 barrel equivalent in 2014.

Fairfield was set up in 2005 with an initial $200m (128m) in financial backing from a consortium of investors led by private equity firm Warburg Pincus of New York. A further $200m followed as the company pursued its aim to buy and develop mature fields being sold off by large incumbent operators.

Warburg Pincus are thought to own just under half of Fairfield, with the remaining equity held by five other investment groups and management.