Beacon Energy plc has trimmed its board and plans to reduce operating costs following lower than expected oil flow from the Schwarzbach-2 sidetrack well in the Erfelden field, Hessen.
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The departure of NEDs Larry Bottomley, previously CEO, and Stephen Whyte leaves non-executive chairman Mark Rollins, CEO Stewart MacDonald, independent NED Ross Warner and NED Leo Koot.
Beacon said that the well was producing intermittently a combination of oil, gas and water using an electrical submersible pump, while clean-up continued.
Production from SCHB-2 is likely to settle in the range of 50 to 100 barrels of oil per day, although a stabilised rate is yet to establish.
The company also expects to reduce operating costs at its local subsidiary Rhein Petroleum GmbH from €2.5 million to approximately €1.3m, over three to six months.
Beacon added it had engaged with around 90% of Rhein Petroleum’s creditors to agree a reduction in liabilities and a deferred payment plan based on the subsidiary’s future cash flow.
Rhein Petroleum will soon begin a formal process with its creditors which includes up to three months’ negotiations.
“We have moved quickly to identify and implement a very material cost reduction strategy aimed at maximising cash generation from Rhein Petroleum,” said Mr MacDonald.
“Discussions with the Rhein Petroleum creditors have been very constructive.”
Beacon will suspend trading from 7.30am on 1 July pending publication of its annual report expected possibly during the first half of August.