It has also launched legal action in the UK against the company leasing the FPSO on the Langsa field, alleging negligence on their part, which caused the mechanical failure and shutdown of the L1 well in November 2001. In response to the legal action, the FPSO contractors shut the field in.

In a company statement, Matrix said after commencing proceedings on Monday (14th October), it received a notice of purported termination of the FPSO contract from the contractors, PT Bawana and Langsa FPL Pte Ltd, on the evening of 15 October, saying all oil production would cease at midnight that night.

Matrix said production had now ceased.

"The notice from the Contractors sought substantial termination charges under the FPSO contract," the statement said, and "Matrix strongly refutes the right of the Contractors to terminate. The directors of Matrix have also requested ASX suspend the company's shares effective immediately.

The directors of Matrix will be working closely with the Administrators in an attempt to come to a satisfactory conclusion as quickly as possible.

"The patience and cooperation of Matrix's creditors during the year has been exceptional, but with the current difficult circumstances it is necessary to now present a plan through the administration," the company said.

"The directors of Matrix have decided to take this action as current world events have made it very difficult to raise funding for offshore oil fields in SE Asia. As previously advised, the company had been seeking to raise capital to enable the re intervention and re entry of the Langsa Technical Assistance Contract."

Bryan Hughes and Vincent Smith of the chartered accounting firm Norgard Clohessy have been appointed.