Oil and gas explorer Salinas Energy will close its Perth office as its managing director transfers to California as part of restructure plans to help maintain the company's oil production profitability.
Oil and gas explorer Salinas Energy will close its Perth office as its managing director transfers to California as part of restructure plans to help maintain the company's oil production profitability.
As part of cost efficiency changes, managing director John Begg will be based in the company's Bakersfield office and has agreed to accept a reduced cash remuneration package.
Director David Bradley, who was recently appointed to the board, will step down.
The changes follow an overall reduction of personnel numbers in the company's California Business unit where operating cost and capital expenditure efficiency programs have been enacted to maintain oil production profitability.
"The current business environment is difficult worldwide and it is uncertain how long it will remain this way," Mr Begg said.
"Despite having what we consider to be a very advantageous position relative to many peer companies in terms of oil production and our cash position we need to make sure that every dollar is well spent.
"Further, as best we can, we intend to use this position to progress with our proven business model and take advantage of the opportunities that we expect to arise."
Salinas operates the North San Ardo field in California and at the end of the September quarter, had $8.2 million in cash.
The company reported earnings before interest, tax, depreciation and amortisation of $5.4 million for the quarter.
The announcement is pasted below:
SALINAS REORGANISES TO STRENGTHEN CALIFORNIA OIL PRODUCTION BUSINESS
Managing Director transferring to California; Perth office to close
Board of Directors reduced to four members
Overall work force reduced and operating cost and capital expenditure efficiency programs enacted to maintain oil production profitability
Additional technical capability added to California business unit
Having already established a reputation as a cost effective oil producer Salinas Energy has enacted a range of measures to ensure the Company's financial position remains robust despite lowered revenues due to the fall in oil price. Further, the Company is redeploying its personnel to best effect recognising that the current depressed business environment also presents opportunities for well resourced companies.
The Perth office of Salinas will be closed and Managing Director John Begg is transferring to California. Mr Begg will be based in the Company's Bakersfield office and will work closely with Resident Manager Greg Wagner to build the Company's business and market profile.
The cost efficiency changes have been applied across the whole Company and the most recently appointed Director to the Board Mr David Bradley will step down. In keeping with these changes the Managing Director hasaccepted a reduced cash remuneration package.
The reorganisation has resulted in an overall reduction of personnel numbers in the Company's California Business unit while at the same time technical capacity is being increased through the addition of a Chief Geoscientist.
Commenting on the measures taken, Managing Director John Begg said:
"The current business environment is difficult worldwide and it is uncertain how long it will remain this way. Despite having what we consider to be a very advantageous position relative to many peer companies in terms of oil production and our cash position we need to make sure that every dollar is well spent. Further, as best we can, we intend to use this position to progress with our proven business model and take advantage of the opportunities that we expect to arise."
