10th May 2016 07:20
LONDON (Alliance News) - Chariot Oil & Gas Ltd stepped up its cost reduction efforts on Tuesday by implementing plans to cut a large chunk of its workforce and to downsize its board, but stressed the decision has been made as a "precautionary measure" as challenging market conditions persist.
Chariot Oil said three of its board members will leave as a result. Non-Executive Directors David Bodecott and Bill Trojan have stepped down with immediate effect whilst Technical Executive Director Matthew Taylor will retire at the company's next annual general meeting.
Taylor will continue to work with the company on a consultancy basis after he leaves to help with the technical aspects of the company's exploration work, including de-risking its programmes.
Chariot also plans to cut the workforce and the payroll of its head office by a third, but did not reveal how many jobs would be lost as a result.
Chariot said the restructuring will generate net savings of around USD1.5 million per year, excluding the cost of implementing the plans.
To put that into some form of perspective, Chariot spent USD2.4 million on wages and salaries in 2015, which was significantly down from USD3.3 million in 2014. That excludes the pay of the directors, which were collectively paid USD1.3 million in wages and salaries in 2015 compared to USD2.3 million in 2014.
Notably, the savings Monday are in addition to the USD1.5 million of savings made in 2015 when Chariot cut its board remuneration in half and made slight changes to its board.
"The company continues to be fully funded to more than satisfy all of its current work commitments. In line with Chariot's strategy, the board regularly reviews expenditure across the business and this decision has been taken as a precautionary measure," said Chariot.
"Current market conditions remain challenging and these actions reflect the board's consideration of the best interests for the company and its stakeholders as well as taking a long term view of the business," the company added.
Chariot shares were up 2.2% to 8.82 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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