Bosses at Offshore Hydrocarbon Mapping, the Aberdeen-based provider of specialist oil and gas survey services, have taken substantial pay cuts as losses at the troubled company widened in the six months to February 28.
The company, which has said previously it may not be able to continue without refinancing or a dramatic upturn in trading, said yesterday it had completed a review resulting in significant reductions in cost, saving it about £13million a year.
It said it had renegotiated charter terms for the OHM Leader and OHM Express survey vessels and some staff at all levels had been made redundant. OHM said in February that about 40 jobs would go, reducing its workforce to about 66.
Executive chairman Dave Pratt said yesterday that, in addition, remaining members of senior management had taken material pay cuts.
He said the oil service industry was facing a deeply challenging period, with many of OHM’s clients unable to raise cash to fund exploration and development programmes and some ceasing trading.
He said lower oil and gas prices had prompted many clients to cut exploration and production spending or to delay planned projects.
Mr Pratt said these savings would not take full effect until the second half of 2009, but the cost adjustments would allow OHM to become cash positive at a significantly lower revenue level than would previously have been required.
But he added: “The directors believe that there are reasonable prospects that a refinancing could be successfully concluded by the end of August if it were to be considered necessary, however, any failure to successfully conclude a refinancing initiative, which is not currently anticipated, would result in significant doubt over the group’s ability to continue as a going concern.”
OHM said yesterday its order book for controlled-source electromagnetic imaging remained low, although its Rock Solid Images business was performing well and its integrated offering combining the different technologies was attracting industry attention.
Mr Pratt added: “OHM’s technologies provide new insights that will drive exploration success and enhance recovery of reserves.
“We continue to focus on prevailing in the challenging conditions we face, and on growing our order book to secure our place in these exciting markets to come.”
OHM reported pre-tax losses of £5.6million yesterday for the period, compared with a £4million deficit a year earlier. Revenue of £6.2million was up 31% on the first half of the previous year.
The company also said it had cash of £2.3million at February 28.