Restructuring saves Linc Energy A$24.7m
PERTH (miningweekly.com) – Singapore-listed Linc Energy has reported A$24.7-million in savings for its 2015 financial year, compared with the 2014 financial year, through a restructure of its organisation and reporting lines.
The decline in the oil price has prompted Linc to undertake a range of initiatives over the past six months to simplify its business and to divest of its noncore assets.
The company said on Tuesday that a review of its global assets and facilities to develop divestment or exit strategies for its noncore business related expenses, in order to reduce maintenance costs, had resulted in savings of some 37% during the 2015 financial year.
In February, the miner announced that it would sell its conventional coal assets, in Queensland, to United Mining Group, in a deal valued at A$5-million.
The assets include Linc’s agreement to acquire the Blair Athol coal mine from the current joint venture (JV) owners; the Teresa development project and its Gladstone port capacity; the Pentland and Dalby development projects and Linc’s Queensland greenfield exploration tenure.
Furthermore, Linc also remained in discussions with a number of interested parties in respect of the sale of its Umiat, in Alaska, and Wyoming oil assets.
Linc said on Tuesday that progress on these discussions has been slower than previously anticipated owing to the downturn in the oil and gas markets; however, the company was confident in the long-term value of both assets and would continue to engage with interested parties while progressing permitting and development plans for the respective fields.
Meanwhile, employee numbers have also been reduced by 38%, while contract numbers have been reduced by 76%, allowing Linc to better align its operations to its strategic priorities without sacrificing capacity.
“Oil prices have halved since June 2014 and this has, not surprisingly, had an effect on our financial position,” said Linc CEO and MD Craig Ricato.
“A considerable amount of work has been undertaken at a corporate level, and in each of our business divisions to improve the company’s position so as to enhance our commercial prospects and improve our ability to operate in a lower price oil and gas environment.”
Ricato added that while the current commodity markets created near-term challenges for Linc, the company remained focused on transitioning the business through the period, while continuing to enhance the long-term value of its assets.
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