Bowleven, the Edinburgh-based oil and gas firm, is to cut its UK headcount by more than two-thirds after deciding not to pursue any new exploration activity.
The Aim-quoted company, which focuses its efforts on Cameroon, said that, “in the absence of an overwhelming case to the contrary”, it would cut its number of full-time employees in the UK from 18 to five. It will also reduce its headcount in Cameroon.
• READ MORE: Bowleven chairman Billy Allan quits oil and gas firm
“The use of contractors will underpin any additional support needed to ensure the company continues to protect and enhance shareholder value, as well as maintaining a proper stewardship over the Etinde and Bomono assets,” it said.
Following the job cuts and other cost-saving measures, Bowleven said its monthly general and administrative expenses will reduce to about $350,000 (£272,000) in the second half of the year, compared with $600,000 a month during the second half of 2016, but the moves will trigger one-off costs of up to $4 million.
New chief executive Eli Chahin said: “We are confident that these changes will allow the company to move forward on a more appropriate cost base, whilst retaining the necessary skills, relationships and capacity to progress a route to shareholder value at both Etinde and Bomono.
“We move forward from a position of strength, with a robust balance sheet, strict capital discipline and an experienced and focused core management team.”
Chairman Chris Ashworth added: “The difficult decisions, made by the board and led by Eli Chahin as our chief executive, impact a large number of people. I would like to thank all the employees of Bowleven for their co-operation and contribution to Bowleven in the past and through this difficult transition period.”
Ashworth secured his place in the boardroom, replacing previous chairman Billy Allan, earlier this year after being nominated by rebel investor Crown Ocean Capital, which also succeeded in ousting former Bowleven chief executive Kevin Hart, finance director Kerry Crawford and non-executives John Martin, Tim Sullivan and Philip Tracy.
Bowleven also announced today that Chahin has been granted the right to acquire up to 10 million shares in the company at no cost under a “transformation incentive plan” designed to “align the interests of employees with the company’s long-term business goals and performance”.