Two top bosses have gone at troubled Sovereign Oilfield Group, it was revealed yesterday.
The Aberdeen firm announced the resignations of chairman and chief executive Graham Burgess and finance director Julie Cowie.
Shares in Sovereign took another tumble yesterday, finishing the day down 37.5% at just 5p.
Chief operating officer Chris McGeehan has been appointed interim CEO. He said: “With these changes, and the additional funding support which our bankers have agreed, we are confident that we can restructure the company to focus on our fabrication strengths.
“We are currently exploring strategic options for our drilling companies, Maxwell Downhole Technology and Serco, as this will allow us to concentrate on building the fabrication companies in the group which have been performing well.
“We plan to introduce a new model for the business, which gives each company within the group more autonomy. At the same time, we will considerably decrease central costs.”
The future for the drilling companies could include their sale.
Sovereign was formed in October 2003 by Mr Burgess and Peter Felter. Mr Burgess has spent most of his career in the oil and gas industry. Previous posts include head of drilling and subsea engineering for Texaco North Sea and worldwide operations manager for Premier Oil.
Ms Cowie joined Sovereign as finance director at the end of 2005. She was previously group compliance manager for Abbot Group and has also held senior finance roles at Premier Oil, Monument Oil and Gas and Chevron UK.
Just last week, Sovereign said it had breached a second-quarter banking covenant and reopened talks with a consortium of lenders, however, a spokeswoman said yesterday that interim financial support had now been agreed. Sovereign struck an agreement with its lenders earlier this year to freeze all outstanding defaults and debt repayments until May 31, 2010.
Last week, the firm said it had suffered the double blow of payment delays at its fabrication arm and continued losses at its drilling division.
The group has sold some subsidiaries in the past year or so, in line with a strategy to focus on fabrication. Some £13million was raised from these deals, which the firm said had been used to reduce debt with its lenders.
In September, Sovereign said pre-tax losses had widened to £9.1million during the year to March 31, compared with a £3.9million deficit the year before, however, it was confident of an improved performance in the current year thanks to disposals, reduced overheads, lower borrowing costs and a recovery in oil prices.