Tap Oil Ltd., Perth, reported it plans to axe jobs and operations so it can meet its restructured debt repayment commitments.
The moves include Managing Director Troy Hayden stepping down on June 1 along with a reduction of the company’s full-time staff. The job cuts will begin next month.
In addition, Mike Sandy, nonexecutive director, will step down from the board in May.
The cost-cutting initiatives also include a divestment of all Tap Oil’s Australian exploration portfolio that has material outstanding commitments and to farmout, defer, or materially reduce the company’s expenditure in Myanmar. It will also reduce costs at its Manora oil project offshore Thailand.
Tap Oil recently cancelled its $4-million share purchase plan and has announced a three-for-five rights issue to raise $7.75 million.
The company’s two major shareholders, Risco Energy and Northern Gulf Petroleum (NGP), have said they will each subscribe for $1.5 million and have agreed to underwrite subscriptions up to $1.6 million each. Perth broker Paterson Securities has underwritten the balance.
Risco and NGP each will be entitled to a seat on the board if their respective shareholdings in Tap Oil reach 25% and outstanding commercial and corporate disputes are resolved.
The capital raising is part of the restructuring of a debt facility with BNP Paribas and Siam Commercial Bank that will enable Tap to repay its outstanding debt of $36 million by yearend 2017.
Tap Oil said the global oil-price downturn had significantly degraded its share of the revenue from Manora oil field and reduced its borrowing capacity under the BNP facility.
Tap made a $54-million full year loss in 2015 following a $44 million loss in 2014.