Trapoil announces board resignations

Trapoil has provided a corporate update announcing the resignation of board members.

Trapoil's board of directors has determined that the company’s best strategy is to reduce operating costs to the minimum in order to maintain its existing assets while seeking to maximise returns from these assets.

Cost reductions

Following the reduction in staffing levels and management pay cuts announced in April 2014 as part of the Group's full year results announcement, the Group has continued to monitor expenditure and decided to take immediate short term measures to significantly reduce the cost base of the business further. This is expected to result in a number of senior personnel leaving the business. It is anticipated that this will result in general and administrative expenses being reduced by approximately a further £1 million on an annualised basis.

Directorate changes

As part of these changes Simon Bragg is resigning his position as Chairman with immediate effect. Mark Groves Gidney, CEO and Paul Collins, COO have also agreed to step down from the Board. Marcus Stanton, a non-executive of the company, will assume the position of Non-Executive Chairman to oversee the transition process with immediate effect.

Cancellation of GE facility

Trapoil has cancelled the three-year facility entered into in January 2013 with GE Energy Financial Services in order to minimise the on-going financing costs. This is expected to save approximately US$ 880,000 on an annualised basis, with a one-off cost of approximately US$ 300,000 paid in 2014.

Scarinish (Alfa) farm-in option

In light of the further potential delays and cost uncertainties on Total E&P UK Limited's (Total) Scarinish (Alfa) well, the Board decided not to commit to contributing to the Alfa well drilling costs, for what would be an unquantifiable and potentially significant amount of money for the company, and therefore allowed Trapoil’s option on Alfa with Total to expire. The company will, however, continue to evaluate ways of maximising the value of its interest in the adjacent Romeo asset.

Comments

Mark Groves Gidney, CEO of Trapoil, commented: "It is sad for myself and Paul Collins to be leaving the company which we both started seven years ago. However it has been a struggle for small cap explorers in the North Sea and in the circumstances we both feel that the proposed strategy is in the best interest of shareholders."

Adapted from press release by Katie Woodward

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/13082014/trapoil-board-members-resign-as-company-cuts-costs-1260/