Oil group Fairfield's float hangs in balance

• Picture: Complimentary

Fairfield, which aims to raise as much as 337 million, was looking for orders at the bottom of its price range as yesterday afternoon's deadline for orders loomed.

Pricing details, or confirmation of a delay, are due to be announced this morning.

Set up in 2005 with the aim of pursuing projects deemed too small for the oil majors, Fairfield set its offer price at between 220p and 420p per share when it launched its offering earlier this month.

The company wants to raise funds to further develop its assets, most of which are in the North Sea.

Sources were yesterday saying that Fairfield was struggling to attract orders for all of the stock on sale. A spokesman for the company declined to comment on the sale process, but refused to rule out the possibility of a postponement.

"Obviously I am not going to tell you that it is absolutely guaranteed to go ahead, what with all of the speculation flying about," he said.

Fairfield's management team, led by chief executive Mark McAllister, was locked in meetings with potential investors late yesterday afternoon. The board was scheduled to meet last night to make a final decision on whether to go ahead with the offering.

McAllister had expected Fairfield to join the FTSE 250 upon listing on London's main market, while other sources have previously suggested a valuation of $1 billion or more.

Funds raised from the flotation are earmarked to boost Fairfield's production from 4,600 barrels of oil equivalent per day to 34,400 barrels by 2014.

However, the company appears to have been undermined by broad-based weakness across equity markets, which has already scuppered dozens of potential flotations throughout Europe this year.

Announcing Fairfield's intentions in June, McAllister conceded that general conditions were not ideal, but added that investor response from pre-marketing meetings had been "very" pleasing.

Fairfield has also been hampered by flagging oil prices, which reduces the attractiveness of the redevelopment projects in which it specialises. These mature assets are located around "core areas" of development in an effort to reduce costs.

Fairfield has four producing fields - Dunlin, Dunlin SW, Osprey and Merlin - which it bought from Shell two years ago. Its focus on the North Sea has given it a significant presence in Aberdeen, and it also has offices at Staines in Middlesex.

The company's other interests include various North Sea assets, as well as the Clipper South field off the coast of central England.

Fairfield is majority-owned by a group of six private equity firms led by Warburg Pincus, which owns roughly three-eights of the business.

The remaining equity is split about evenly between the group's five other members, while the management team also holds a small stake.

These investors, who are not selling shares through the current offering, have put about $400m into the company to date..