(Alliance News) - Coro Energy PLC on Thursday said Chief Executive James Menzies has had his employment terminated after he did not accept any options to reduce the firm's costs.
Shares were 23% lower on Thursday at midday in London at 0.50 pence each.
Given the recent slump in the oil price amid the Covid-19 crisis, Coro is cutting its executive staffing and reducing associated costs.
After talks with investors, Coro said it offered executive directors three options: an unpaid sabbatical, three months' notice payable in shares to terminate their employment, or stepping into a non-executive role.
The firm said CEO Menzies did not accept any of these options and as a result, his employment has been terminated with immediate effect. He will not receive any payment, and all share options have lapsed.
Coro said it will update if any claims are made by Menzies or if any settlement is reached.
Chief Financial Officer Andrew Dennan has chosen to become a non-executive director. Non-Executive Director Nick Cooper has resigned, leaving with immediate effect.
Remaining on the board are Non-Executive Chair James Parsons and non-executive directors Dennan, Marco Fumagalli and Fiona MacAulay. Parsons, Fumagalli and MacAulay have agreed 25% pay cuts for three months.
Coro has a 15% stake in the Duyung production sharing contract off the coast of Indonesia, as well as a portfolio of Italian gas assets, which are currently being sold.
Coroa believes the ongoing Covid-19 crisis in Italy means the sale of the Italian assets will likely be delayed due to the non-receipt of government approval.
Further, gas prices in Italy are "significantly" lower than a year ago and Coro expects this to continue. As a result, it has halted production at the Sillaro, Bezzecca, and Case Tiberi fields which it believes will save around USD100,000.
Production at the Rapagnano field will continue.
As of March 31, Coro had cash balances of around USD4.5 million, a "strong" position, though it will still be looking to reduce costs across the business.
Non-Executive Chair Parsons said: "These are unprecedented times not just for the oil and gas industry but wider society as countries around the world face up to the challenge presented by Covid-19 and its health, social and economic impact.
"The ensuing commodity price volatility has only made the task tougher for E&P companies, but the board continues to believe in Coro's long term prospects and the now-proven quality of its Mako asset, as well as its ability to add further opportunities to the portfolio when macro conditions improve.
"There remain opportunities in oil and gas, particularly in strong regional gas markets like Asia and in special situations, however, in the near term, we have moved decisively in the interests of the company and its shareholders to protect our balance sheet in order to ensure Coro can weather the difficult period the industry currently faces. I am delighted Andy will be staying on in a non-executive capacity," he added.
By George Collard; georgecollard@alliancenews.com
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Coro Energy (CORO)