Edinburgh-based oil and gas firm Capricorn Energy, where shareholders recently ousted the executive leadership and terminated a planned merger, has announced it “will need a substantially reduced headcount in the UK” as it focuses its operations “primarily on Egypt.”
Up to 120 jobs could be cut.
Capricorn, formerly known as Cairn Energy, said it will “shortly enter a redundancy consultation process which is expected to result in an organisation of less than 40 people in the UK.”
As a result of the reduced headcount, the company said it will be reviewing its UK office space requirements to “align to the expected size of the renewed organisation.”
Capricorn Energy terminated its planned merger with Israeli gas group NewMed Energy on February 15 after months of shareholder pressure that also toppled Capricorn’s executive leadership.
Activist shareholder Palliser Capital and some of Capricorn’s biggest shareholders had publicly opposed the merger, arguing that it undervalued Capricorn.
Proxy advisers also recommended rejecting the plan.
In early February, almost the entire Capricorn board including its chief executive were replaced by new directors proposed by Palliser.
confirmed six new board members, with Craig van der Laan appointed the firm’s new chair and Chris Cox appointed interim chief executive officer.
The new directors announced a strategic review of the company.
Capricorn said in a stock exchange statement on Thursday: “As announced on 1st February, the new board has now commenced its comprehensive strategic review of Capricorn’s business and the several potential directions for the future of the company.
“Ahead of announcing the initial results of this strategic review on 27 April, Capricorn today provides an update on decisions which have been made about the company’s exploration portfolio and cost base.
“In the earliest days of the strategic review, the board concluded Capricorn’s near-term strategic focus should be primarily on Egypt, and to farm down, monetise or exit exploration concessions outside Egypt.
“As a result, Capricorn will need a substantially reduced headcount in the UK and will therefore shortly enter a redundancy consultation process which is expected to result in an organisation of less than 40 people in the UK.
“Capricorn anticipates the majority of these changes will be made in the coming two months.
“As a result of the reduced headcount, the company will be reviewing its UK office space requirements to align to the expected size of the renewed organisation.
“A further update with more quantitative and qualitative detail on costs will be provided on 27 April, as part of the wider strategic review update.”