IOG (AIM:IOG) has announced sweeping changes to its board and executive team including the departure of chief executive Andrew Hockey, following another cut to its production guidance and long-running drilling delays.
In a shareholder update on Thursday the company said Mr Hockey had informed of his intention to retire as CEO and step down from the board with immediate effect, having spent nearly five years in the role.
He will be replaced in the role of CEO by chief financial officer Rupert Newall. Mr Newell helped lead IOG’s restructuring and farm-out to CalEnergy Resources in 2019 before joining the company as CFO.
Chairwoman Fiona MacAulay said: “As IOG navigates a challenging initial phase of production and works up further development phases, this is an appropriate time to give the executive team fresh impetus.”
It comes just 24 hours after the southern North Sea-focused gas producer cut its production guidance for the second time in three months amid long-running delays to drilling at the A1 and A2 wells on the Southwark field, a key component of its core Saturn Banks development.
The project delivered first gas in March, but has struggled with equipment failures and shut-ins, while drilling at its next phase – including Southwark – has slowed.
IOG’s shares sank on the news, collapsing from 18.78p to end the day at around 8p.
Meanwhile, chief operating officer David Gibson will also step down with immediate effect, while a new appointment – Dougie Scott – will take on the role of COO. Mr Scott will also likely be appointed to the IOG Board following completion of regulatory due diligence.
He brings 30 years of upstream operational experience, predominantly in the southern North Sea where he led teams delivering production, drilling, offshore hydraulic stimulation, across green and brown field projects for the likes of Shell, RWE Dea UK and most recently INEOS Oil and Gas.
John Arthur will also take on the role of CFO with immediate effect, though will not join the group’s board.
Mr Hockey will remain with IOG as an advisor to the board in order to leverage his “deep Southern North Sea geological, commercial and regulatory expertise”, IOG said – knowledge it hopes to leverage in support of its participation in the upcoming 33rd UK Offshore Licensing Round announced by the North Sea Transition Authority this month.
Ms MacAulay added: “Under Andrew’s leadership since early 2018, IOG has been transformed against considerable odds from an unfunded vehicle with disparate assets into a fully funded UK gas producer.
“I would like to personally thank Andrew on behalf of the Board for all his exceptional hard work and tenacity over the years and am very pleased that he has agreed to stay on to provide his invaluable advice on our 33rd licensing round ambitions. I would also like to thank David Gibson for his tireless efforts in his time as COO, tackling several complex issues to help IOG become the UK’s newest gas producer earlier this year.”
She said the new CFO and COO appointments would help bring the right expertise to “overcome operational hurdles and grow IOG into a leading UK gas production business.”
Mr Hockey said his departure was “the right time to pass on the baton,” and welcome the appointment of his successor.
Mr Newall added: “I can assure our shareholders that I will fulfil my new role with passion, drive and decisiveness, not just in addressing near-term operational challenges but also the significant growth opportunities ahead.
“In looking forward to the exciting opportunities ahead, both within our existing portfolio and via complementary further additions, I am also mindful that we learn the lessons of previous setbacks to improve our future performance.
“Through proactive risk management, a refreshed operational approach and further additions to a talented core team, we can be better prepared to maximise the value of our established infrastructure and production position in the years ahead.”
Commenting on the changes, Panmure Gordon research analyst Ashley Kelty noted: “After the problems and delays that have dogged the companies SNS developments it is hardly a surprise that the axe has been wielded. However, investors will rightly question whether the new management team can turn the business round in the near term.”