ENERGY group IGas yesterday announced plans to cut more than 25 per cent of its 200-strong workforce and close its office in Stirling to reduce costs in the wake of the fall in oil prices.
The news came just a day after the onshore explorer completed the sale of its shale gas exploration licence around Grangemouth to chemicals group Ineos.
IGas’s co-founder and chief executive Andrew Austin is also stepping down from the board and will be replaced by chief financial officer Stephen Bowler.
Austin said: “I have been at IGas for more than ten years. The announcement of the completion of the transaction with Ineos means that the company is entering a new phase of execution, well-funded by its partners and with a stable production base.”
In the trading update yesterday, the company said it was cutting costs “in light of the prevailing oil price environment”,
Production in the year to 31 March averaged 2,737 barrels of oil equivalent per day, marginally below the figure for 2013-14.
IGas explores and develops gas and oil reserves at a number of onshore locations including Lybster in Caithness, the north west of England, the east Midlands and the Weald Basin in southern England.
Under the deal with Ineos, it has paid IGas £30 million for the Grangemouth licence and will fund a two-phase work programme of up to £138m to appraise and develop the sites.
At the time Gary Haywood, chief executive of Ineos Upstream, said: “We believe shale gas could revolutionise UK manufacturing. Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that communities must share in the rewards for it to be successful.”
IGas had acquired rival Dart Energy and its Scottish interests including the Stirling office last May in a deal worth nearly £120m, creating Britain’s biggest shale gas explorer.
Australian-owed Dart had been planning a listing on the Alternative Investment Market before the deal with IGas was announced.