Molopo Energy’s new board, led by Perth-based chair Samantha Tough, has announced the sale of its major asset and commenced a cost-cutting review, following a board shake-up last week.
In a statement today, Molopo said its Fiesta oil and gas assets in Texas, the only producing assets it owns, were not generating positive cash flow to the company and were not part of its “go forward plan”.
As a result, the company has entered into an agreement to sell the assets to an unnamed buyer for $US1 million.
“There are several costly capital expenditure programs that would need to have been undertaken had the company continued to own the properties,” Molopo said in a statement.
“Once the sale is finalised, there will be a material reduction in overheads, as the costs associated with managing and reporting these operations will no longer be required.”
Ms Tough will also take on the role of interim independent chairman until the composition of the board is finalised.
Molopo said that while employee numbers were small, the board was conducting a review of all corporate overheads to reduce unnecessary expenditure.
Its corporate office will also remain in Melbourne “for the time being”.
Ms Tough, who is also a director at Synergy and Saracen Mineral Holdings, recently made headlines last month when she resigned as director of grain grower cooperative CBH Group, just nine months after taking the job.
Molopo shares closed 3.12 per cent higher at 16.5 cents per share at 2:50pm.