Titan collapses

THE resources bust has claimed another scalp, with Titan Energy Services appointing FTI Consulting as voluntary administrators to oversee the affairs of the group, after it realised it was at risk of becoming insolvent.
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Haydn Black

The writing has been on the wall for the Brisbane-based Titan for more than a year.

The company flourished in the boom and eventually listed on the Australian Securities Exchange in 2011, but the engine sputtered once the coal and CSG contracts dried up and metal prices slumped.

FTI’s Joanne Dunn and Stefan Dopking were appointed to take control after the company realised that the ability to win new work and raise additional funds required time, but the board had been unable to pursue refinancing, business combinations and disposal of further businesses or assets to ensure sufficient working capital to continue operations under terms that were acceptable to its secured creditor.

With little prospect of the company remaining solvent, the administrators were called in to examine new ways of keeping Titan as a viable going concern.

Titan owns Atlas Drilling, and a variety of logistics, camp facilities and camp services business.

There have been no active camp management, catering or housekeeping services contracts in place for months and its water and waste businesses are also without contracts.

The Atlas Rig-2 is the only one of its four rigs working, and that contract is expected to end shortly.

The rig isscheduled to be demobilised from the Ungani Far West-1 well, which is was last drilling at about 1745m, once drilling reached the top of the Ungani Dolomite reservoir below 2100m next week.

The rig, which has been drilling successfully on a turn-key contract, will then be released by Buru Energy and Mitsubishi. It is not understood to have further work.

Buru is working with the administrator to ensure there is no interruption to the planned drilling schedule.

In November Titan chairman Shaun Scott said BG Group’s announcement of a $1.7 billion project near Tara by BG Group held out the promise of future work, but in the end a revenue slump by half to $43 million on the year prior due to the speed of the unexpectedly sharp downturn resulted in a loss of $36.5 million, comprised largely of a $21.4 million writedown of property plant and equipment.

Titan sold its Hofco Oilfield Services business in May to help reduce debt, shrunk its workforce from 230 to 48, and combined its Resources Camp Hire, Nektar Remote Hospitality and Base Transport and Logistics units into a single Accommodation Services business.

But it was not enough, and last month managing director Christine Haywood was unable to provide guidance targets for 2015-16 because of the challenging market conditions.

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