Ithaca Energy plans to shed a quarter of its onshore workforce after sinking to a £944m pre-tax loss amid the “historic collapse” of oil and gas prices.
The Aberdeen-headquartered operator said in its first quarter results that the commodities crash brought on by Covid-19 resulted in impairments of £646m on its assets.
As part of cost cutting measures, Ithaca Energy revealed it is shedding 25% of its onshore staff in Aberdeen through a “voluntary leavers programme” launched in April, while also reducing its use of contractors.
Ithaca said around 200 staff will remain once the process is completed in the third quarter.
The firm previously warned of “redundancies” as a result of the downturn but did not disclose figures.
A spokesman said: “In April 2020, approximately 25% of our onshore employees chose to participate in our Voluntary Leavers Programme and we are working with them as they gradually transition out of the business.”
Ithaca, which last year completed a £1.6billion deal for Chevron’s North Sea assets, is aiming to cut operating costs by 15% in 2020, meaning delays to a number of projects.
BP’s Vorlich field, which Ithaca holds a 34% stake in, has been delayed from mid-2020 start-up to the fourth quarter due to the virus.
Although “strong progress” has been made on subsea installation, the virus has hindered remaining construction work, Ithaca said.
Vorlich is a two-well tieback to the FPF-1 vessel in its Greater Stella Area.
Elsewhere, Ithaca already forecast in April that its Alba infill project would be deferred.
Timing of work on the Captain enhanced oil recovery project and Greater Stella Satellite projects like the Hurricane well have also been hit.
Ithaca said future hedging of prices worth £415million had offset some of its oil price-related impairments.
Meanwhile production for the first six months of the year is expected to average 72,000 barrels of oil equivalent per day (boepd), ahead of initial guidance on 63-68,000.
The company posted first quarter revenues of £283m, up from £87.5m in the same period last year.