The reboot plan found some favour in London with the news inspiring a 24% rally in Friday’s early deals
Advance Energy PLC (AIM:ADV) announced chief executive Leslie Peterkin is leaving the company as part of a cost-cutting programme aimed at slashing its costs base by 50%.
It comes after the unsuccessful Buffalo well, offshore Timor-Leste, and the more than 90% drop in share price that followed.
Today, the company told investors former Chariot Oil & Gas boss Larry Bottomley will step up from his non-executive director position to be Advance Energy’s new interim chief executive.
Bottomley will be tasked with ushering in a new strategy for the company which will aim to recreate the exploration investor as “an oil and gas production company to take advantage of growth opportunities.”
The plan is to focus on non-operated cash-generative assets among the project pipeline that the company has previously reviewed over the past twelve months. Such opportunities could be in Europe, Africa and the Far East it added.
Advance Energy said it is looking at debt or vendor financing for such opportunities and added it is currently funded to mature these options. It said it is confident it will enter an agreement on at least one opportunity from the pipeline in the current calendar year.
“Advance Energy has an exciting set of opportunities in the business development pipeline and a motivated and high-quality board focused on growing the company,” Bottomley said in Friday’s statement.
“Reducing the cost base leaves the company with sufficient cash and no debt, and importantly allows more time to assess and progress this pipeline.
“The board are committed to delivering assets from the business development pipeline and excited by the opportunity it offers, and we look forward to updating the market as these progress.”
Leslie Peterkin added: “The outcome of the B-10 well was a huge disappointment given the significant input that went into the project and the high degree of confidence that it would result in a commercial development.
“To support the company with its efforts to reduce the cost base, I have decided to step down, and leave the company in the very capable hands of the remaining board who I have no doubt will steer Advance Energy through these near-term challenges and set the company on a new long-term growth path.”
The 50% cost cutting plan announced today includes a reduction of salaries and director fees by over 60%.