The UK's offshore oil and gas industry needs Government support if its future is to be secured following its most costly year since the 1970s, a report says.
The study, conducted by the industry pressure group Oil & Gas UK, was said to have found "striking evidence" of how rising costs, taxes and "inadequate regulation" had taken their toll on international competitiveness.
The body's 2015 activity survey of exploration and production companies, operating mainly in the North Sea, found that revenues declined to just over £24bn last year, the lowest since 1998.
That, combined with rising costs, resulted in a negative cash flow of £5.3bn - the worst since the 1970s.
Investment in new projects over the next three years was last year forecast at £8.5bn, but this year's survey estimates it at around £3.5bn.
It can be partly put down to the collapse in world oil prices - falling by 60% at their weakest, below $50-per barrel - while raw gas costs are 30% down on 12 months ago.
Companies have reacted by scaling back exploration plans and cutting jobs and pay, particularly among sub-contractors.
Chancellor George Osborne has promised measures in next month's Budget to support the industry.
The report demanded urgent action to secure new investment and address a "collapse" in exploration that saw only 14 out of the expected 25 new wells drilled.
Oil & Gas UK's chief executive Malcolm Webb said: "This year's activity survey paints a bleak picture but also identifies this region's potential, emphasising the importance of government and industry now putting the right measures in place to secure its long-term future.
"This is crucial, not only for the energy security that domestic oil and gas production provides, but also for the hundreds of thousands of highly skilled jobs, advanced technology and billions of pounds of exports which the industry underpins.
"Without sustained investment in new and existing fields, critical infrastructure will disappear, taking with it important North Sea hubs, effectively sterilising areas of the basin and leaving oil and gas in the ground."
"Even at $110-per-barrel the ability of the industry to realise the full potential of the UK's oil and gas resource was hamstrung by escalating costs, an unsustainably heavy tax burden and inappropriate regulation.
"At current oil prices, we now see the consequences only too clearly.
"The industry recognises that its cost base is unsustainable. Cost and efficiency improvements of up to 40% are required to give this basin a viable future. This adjustment is now under way, but cost control alone is not the answer."
A Government spokesman said: "The Oil & Gas UK report underlines the need for a concerted and joined-up approach between the Government, the Oil and Gas Authority and industry to ensure investment and exploration in the UK North Sea continues and is able to get through this difficult period.
"The UK Government recognises how important the North Sea is, both in terms of the thousands jobs it supports and the benefit it brings to the UK economy.
"The package of fiscal changes and initiatives announced by the Treasury in early December shows the Government understands the challenges and is on the front foot in dealing with them."
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