Igas Energy PLC - Operations and Cost Savings Update
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("IGas" or "the Company")
Operations and Cost Savings Update
IGas today provides an update on its operations and measures that are being implemented to further, materially reduce the Company's cost base.
On 1 May, when the oil price was trading at c.
The remaining six shut-in fields, alongside Albury gas to grid, account for c.320 boepd. The Company will continue to keep these sites under review in light of, inter alia, commodity prices. Additionally, during the ongoing COVID-19 lockdown period we have been, and continue to be, impacted by supply chain interruptions, resource availability constraints and well servicing issues. We estimate that the resultant project delivery delays and lower productivity levels will have an annualised impact of c. 150 boepd.
Taking these elements into consideration, our current expectation for 2020 production is in the range of 1,850 - 2,050 boepd.
In light of the ongoing uncertainty and difficult markets, and as previously announced, the Company has undertaken an in-depth review of costs.
During the first five months of the year, cost reductions of c.
The Company is now undertaking further cost reduction measures including a redundancy programme, salary replacement for the Board and senior executives, and a proposed reduction in benefits across the organisation. Whilst these measures reduce our costs, we are also seeking to ensure the retention of key capabilities and experience in the business.
The salary replacement initiative comprises a 15% reduction in monthly salary paid with a replacement to be awarded in nil cost options, save for one of the Non-executive Directors, whose entire monthly fee will be replaced with the issue of shares, on a quarterly basis, for the remainder of 2020 to
These measures are expected to reduce costs by a further c.
In addition to the above, particularly given the way in which the business has been able to react with many staff working effectively from home, the Company will exercise the break notice in the lease agreement for its
"I am extremely pleased with how all the teams have pulled together in these challenging times and how we have reacted to rapidly changing working practices and market conditions.
I would like to thank each and every one of our staff for their professionalism and hard work in these exceptional and difficult circumstances, and it is with regret that we have had to conduct a redundancy exercise. Like many other organisations across all sectors of the economy, we need to preserve cash and however difficult the decision, these are unfortunately very necessary steps which we need to take to be as well placed as possible for the future.
We continue to make the health and safety of our staff and local communities our priority whilst actively managing our asset base for the benefit of our shareholders."
For further information please contact:
Canaccord Genuity (Joint Corporate Broker) Tel: +44 (0)20 7523 8000
Vigo Communications Tel: +44 (0)20 7390 0230
This information is provided by RNS, the news service of the
Quick facts: IGas Energy Plc
Market Cap: £17.84 m
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