Sector News

Ophir Energy to reduce headcount and close offices in $60million savings bid

July 6, 2015
News
Ophir Energy will close almost half of its offices and reduce its headcount as it looks to streamline costs following its acquisition of Salamander Energy earlier this year.
 
The move was made as chief executive Nick Cooper admitted the company faced a “tough time” in the commodity cycle.
 
However the company’s head insisted Ophir continued to have a strong balance sheet despite the changes.
 
The total number of jobs affected has yet to be made public.
 
The fall in oil price last year left company’s in regions across the world, including the UKCS and the US, faced with reducing staff in a bid to streamline costs.
 
The decrease in office space has been made after the company inherited a number of buildings during the acquisition process from Salamander Energy which was finalised in March.
 
Ophir said cost savings – which have been estimated at around $60million – had been driven by looking at its operations and “lower group headcount and contractor staffing.”
 
A spokesman said: “Ophir is in the process of closing five of the eleven offices either owned by the group or inherited at the time of the Salamander acquisition in March.
 
“The remaining six offices have also been scaled back to reduce costs and improve efficiency.”
 
Since the recent acquisition, Ophir management implemented a company-wide cost rationalisation programme.
 
Nick Cooper, chief executive of Ophir, said: “This is a tough time in the commodity cycle but Ophir has a strong balance sheet and minimal capex commitments.
 
“Our financial flexibility provides a competitive advantage and Management is actively screening opportunities to enhance shareholder returns.
 
“The integration of Salamander is progressing well: we are delivering cost savings of $60million, which exceed the previously identified synergies.
 
“Even after the partial deleveraging in the first half of 2015, the cash flow from our producing assets will return Ophir to a similar cash position by end 2016 to that which the Group expected to have had pre-acquisition.
 
“In its operations, Ophir has had a successful first six months to 2015. We delivered production as forecast and all development activities are progressing to plan.”
 
As well as revealing its plans to change its headcount, Ophir also confirmed production during the first half of 2015 averaged 14,600 boepd.
 
Group revenue, cash flow and capex are expected to be in line with expectations at cash at year end for 2015 remains between $700-750million.
 
By Niamh Forrest
 
Source: Energy Voice

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