Rose Petroleum Plc (LON:ROSE) Chief Financial Officer Chris Eadie talks to DirectorsTalk about positioning the company ready to take advantage of a better market. Chris explains what they are currently seeing in the market, the findings of the strategic review, how they are implementing a strategy of cost saving and de risking and what this means for Rose going forward.
The company today said, in overview, given the very challenging market conditions, the board of directors of the Company (the “Board”) has taken major steps to reduce costs and liabilities across the Group to enable the Company to weather the current market conditions and to position the Company for the recovery. Whilst doing this the Board has been seeking and reviewing additional opportunities which it believes could offer substantial value to shareholders.
Highlights:
· Strategic review of Group assets with a view to conserving existing cash and de-risking the asset portfolio
· Disposal of Cisco Dome field and, with it, the associated plug and abandonment liability on over 50 wells and termination of Mancos earn-in
· Focus on larger, more prospective Paradox acreage and reduction of Paradox earn-in threshold by US$2m to US$5.5m
· Partner secured on the Ardmore Copper Project and drilling underway
· Significant reduction of Group and Head Office operational costs and a reduction of Group liabilities
Matthew Idiens, CEO of Rose Petroleum Plc, commented: “The amendment to the earn-in agreement has given us the opportunity to substantially de-risk the Oil and Gas portfolio and we can now focus on the Paradox acreage, with in excess of 1 billion barrels of oil, and which we believe has a greater chance of success than the Mancos. The amendment also means we have eliminated the Group’s P&A liability which became an increasing issue as market conditions declined and gives us the opportunity to further reduce the underlying operational cost base. In the current market conditions and taking into account the general outlook, the Board believes this is the best course to follow. We have combined this with implementing dramatic cost cuttings throughout the Group and feel we are now well positioned for both the present and for a future upturn. Rose has always retained a diverse portfolio of assets to enable it to adapt rapidly to changing market conditions and we continue to believe that even in these challenging markets there are opportunities to create value for our shareholders.”
