Rockhopper has cut its Italian team by 50% as it looks to ramp up production and save costs.
The firm now has less than 10 people working in its Italy office. It comes after the firm streamlined its UK operations, combining its London and Salisbury staff into a single office in London.
In its latest corporate update, the oil and gas explorer also said a settlement had been agreed on the insurance claim relating to costs incurred on the Isobel Deep well during the 2015/16 North Falkland Basin exploration campaign.
The value of the settlement is $90million (after deductions) on a gross basis. Rockhopper’s share of such proceeds is approximately $49million, of which $16million had been received. The rest is expected to be received before the end of the year.
Chief executive Sam Moody said: “This has been an important period for Rockhopper with progress made on a range of fronts. With costs on Sea Lion continuing to fall and our balance sheet strength still in place, we remain alert to opportunities to materially grow our Greater Mediterranean business in 2017.
“Through 2016, as the Sea Lion FEED process has progressed, we have seen a material reduction in costs and significant improvements in the overall economics of the project. Life of field costs for Phase 1 of Sea Lion are now approximately $35 per barrel – highly attractive in the context of today’s oil price and we continue to actively explore all avenues to move the project toward sanction.
“We have significantly increased production and cash flow in the Greater Mediterranean region and see further scope to materially grow that business in 2017.
“Our balance sheet remains strong with expected year-end cash of approximately $80 million before the remaining North Falkland Basin exploration campaign close out costs.”