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Troubled UK independent Afren saw its share price fall 55 percent Tuesday after warning of a massive cash crunch as it tries to restructure its finances and ink a merger deal with Nigeria’s Seplat Petroleum Development Company (Seplat).

The company had a cash balance of $235 million as of December 31 but available liquidity is “significantly lower” due to restricted and segregated cash balances put in place to address operational requirements.

Afren said if its current debt structure remains in place its equity funding requirements will outstrip its current market capitalization.

The company’s near term cash flow has also taken a hit from capital expenditures incurred in late 2014 before the company adjusted its operations to better accommodate weak oil prices.

Earlier this month, Afren began negotiations with lenders to obtain a deferral for a $50 million amortization payment due on a $300 million credit facility at the end of the month.

The company’s board is also considering using a 30 day grace period under its 2016 bond terms to defer a $15 million interest payment due on February 1 while it reviews funding alternatives.

Afren has tapped Morgan Stanley to put together potential restructuring plans as the company tries to ink a merger deal with Seplat.

“These actions are being taken to protect the immediate liquidity position of the company while it seeks funding to address its additional requirements,” Afren said.

The company said it is still in discussions with Seplat although “there can be no certainty that an offer will be made.”

Earlier this year, Afren axed CEO Osman Shahenshah and COO Shahid Ullah after the two executives were found to have accepted $20 million in unauthorized payments from third parties.

The two men paid Afren back the funds earlier this month and the company agreed to not pursue legal proceedings.