Advance Energy ( AIM: ADV ), the energy company seeking growth through acquisition or farm-in to discovered upstream projects, provides the following corporate update:
· The Board has implemented measures to reduce the Company’s cost base by over 50%
· CEO Leslie Peterkin to leave the Company to support cost cutting measures
· Larry Bottomley to assume Interim CEO role to drive new ventures
· The Company remains fully funded for the current calendar year with no debt
· The Board has refocused the strategy for the Company and is actively progressing a pipeline of value accretive opportunities within this new strategy
Following the recent results of the Buffalo-10 well, the Company has undertaken a review of its cost structure in order to significantly reduce costs. The Board has implemented measures to reduce the Company’s costs by over 50% through a number of initiatives, including reducing salaries and Director fees by over 60%. To support these initiatives, CEO Leslie Peterkin has decided to resign from the Company with immediate effect, and he will be replaced on an interim basis by current Non-Executive Director Larry Bottomley.
Following completion of the Buffalo-10 well and the settlement of associated authorised costs, and supported by the initiatives to reduce the cost base, the Board believes it has sufficient liquidity to progress new business development through the current calendar year.
The Board has refined the strategy for the Company, which is to create a self-funding oil & gas production company to take advantage of growth opportunities being generated as industry players reshape their portfolios to manage energy transition to net-zero emissions.
By concentrating on non-operated cash-generative assets and capitalising on the current deal pipeline, the Company aims to lever the time and cost expended in assessing potential new ventures over the last year built on the Board’s extensive industry relationships. Ranging from Europe, Africa and the Far East, the opportunities the Company is assessing are suitable for debt or vendor financing, and the Company is currently -funded to mature these options.
The Board is confident that it will enter into an agreement on at least one opportunity in its pipeline this calendar year.
Commenting on the update, Non-Executive Chairman, Mark Rollins, said:
” We thank Leslie for his efforts since the inception of Advance Energy, including his decision to leave the Company in order to reduce its cost base. The Board fully recognises the disappointment of recent events and being wholly aligned with shareholders, recognises what needs to be done to stabilise and re-build. Advance Energy retains a high quality and well-connected Board which is progressing a compelling business development pipeline .
“I would also like to thank Larry for stepping into the role of leading the Company through this next stage of delivering new business, no doubt with the energy and enthusiasm that he has brought since joining the Company at the RTO.”
Outgoing CEO Leslie Peterkin added :
“The outcome of the B-10 well was a huge disappointment given the significant input that went into the project and the high degree of confidence that it would result in a commercial development. To support the Company with its efforts to reduce the cost base, I have decided to step down, and leave the Company in the very capable hands of the remaining Board who I have no doubt will steer Advance Energy through these near-term challenges and set the Company on a new long-term growth path.”
Incoming Interim CEO Larry Bottomley added :
“Advance Energy has an exciting set of opportunities in the business development pipeline and a motivated and high quality Board focused on growing the Company. Reducing the cost base leaves the Company with sufficient cash and no debt, and importantly allows more time to assess and progress this pipeline.
“The Board are committed to delivering assets from the business development pipeline and excited by the opportunity it offers, and we look forward to updating the market as these progress. ”
Advance Energy plc
Larry Bottomley (Interim CEO) / Stephen West (CFO)
+44 (0)1624 681 250
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