Dublin-based oil company Petroceltic has failed to meet payment obligations on $218m-worth of secured senior debt due to low oil prices, it said in a stock market disclosure.

It is actively looking for takeover offers, but is not thought to have received any serious offers since 23 December.

Having failed to raise additional finance to develop the $2bn Ain Tsila gas and condensate field in Algeria, Petroceltic can only cover its costs there until the third quarter of 2016.

Petroceltic farmed out part of its stake to state-owned Sonatrach, reducing its interest to 38.25 per cent. About $90m of the proceeds of the farm-out remained by the end of November 2015.

The small oil company signed a $500m syndicated loan deal in 2013 to develop Ain Tsila. The mandated lead arrangers were UK-based HSBC, the International Finance Corporation – part of the Washington-based World Bank Group, South Africa’s Nedbank and UK-based Standard Chartered. Due to development and investment milestones being postponed, Petroceltic is required to make payments under the terms of the loan.

The lenders are working with Petroceltic by delaying payments until 15 January, and supporting its search for buyers and new sources of finance.

As part of its efforts to meet its debt obligations, Petroceltic is selling three exploration licences for $9.5m in Egypt to its joint venture partner Edison International. This will reduce its exploration expenditure by $20m in 2016.

It is hoping to sell other Egyptian assets as well as receivables from the Egyptian government, which is $3bn behind on payments to oil companies. It may also sell off or farm out other assets, merge with or be acquired by another company.

UK-based analyst Wood Mackenzie expect a rise in upstream oil mergers and acquisitions in 2016, as firms are squeezed by low oil prices. Buyers will be looking to push valuations down.

Petroceltic’s share price fell from €0.45 ($0.48) to €0.25 on the news.

The company reissued tender documents for the Ain Tsila project in December 2015, but it remains uncertain when the four prequalified contractors will be required to submit bids.

Development drilling is expected to start in February this year, and the company still hopes to make an award in the third quarter of the year. First gas production has been pushed back to early 2019.

According to the front-end engineering and design (feed) work carried out by Netherlands-based CB&I, the surface facilities will process up to 420 million cubic feet a day (cf/d) of wet gas.

The facilities will also transport dry gas, liquefied petroleum gas (LPG) and condensate to existing tie-in points in the Algerian national pipeline grid.

The Ain Tsila gas field is located in the Illizi basin, within the Isarene permit in Blocks 228 and 229a. Sonatrach owns a 43.375 stake in the development company while Italy’s Enel owns the remaining 18.375 per cent.