PetroNor taking cost-saving measures amid low oil price environment
- Business & Finance
Oil and gas company PetroNor E&P is taking a number of cost-saving measures to ensure the company is appropriately structured in the current low oil price environment.
PetroNor has interest in assets located in Africa, including the Republic of Congo, Senegal, Gambia, and Nigeria.
According to PetroNor’s statement on Monday, its producing assets in Congo Brazzaville have robust economics capable of generating operating free cash flow with breakeven prices in the order of $20 per barrel. Such production costs include field operating costs, including capex for the ongoing work-over and drilling program, royalties and an estimate of profit-sharing based taxes, where applicable.
PetroNor is selling its oil on a regular basis through its lifting arrangement with Eni, thus the company is realizing a monthly average of the oil price for each lifting.
The company said the board was undertaking a program to improve cost-management and enhance operating efficiencies throughout the business to ensure the company was appropriately structured for the current market conditions.
The board has already made progress in reducing overheads through streamlining the organization and reducing the cost base, and is targeting further reductions in G&A through a number of cost-saving initiatives, including a continued reduction in salaries and expenses as appropriate, PetroNor said.
Knut Søvold, CEO of PetroNor, said, “The industry is currently recalibrating to a sudden change in economics following the rapid decline in commodity pricing. Fortunately, our producing assets have robust economics capable of remaining profitable down to $20 a barrel. We are saddened by the impact of the current crises on global society.
“Despite the current issues, we remain optimistic about the long-term demand and economics associated with the oil and gas industry across the African continent, and we expect more business development opportunities to present themselves on account of this market dynamic. The company remains well placed to create value from its existing portfolio and expects to capitalize on compelling inorganic opportunities in line with its stated growth strategy.”