Rose Petroleum (AIM:ROSE ) said it is “well positioned” to weather the conditions of the pandemic as it announced measures to conserve cash and safeguard its existing asset base.
The rocky mountain-focused oil and gas company told investors that it has implemented a further substantial cost reduction programme to conserve its existing cash resources.
The group said this will involve significant cash reductions including salary cuts of at least 50% for all directors and senior management until such time that the Board deems prudent.
It noted challenges prior to the pandemic in the US oil and gas industry and that the recent commodity price drop has meant “increasing disarray, especially amongst smaller producers.”
However, CEO Colin Harrington said the measures will enable the group to continue trading effectively for the foreseeable future while retaining its operational focus and capability.
Shares in Rose Petroleum were trading flat at 0.525p on Friday morning.
Meanwhile, the group has undertaken efforts for growth via its value-orientated acquisition opportunities.
Rose has negotiated an extension to the proposed acquisition of a stake in the McCoy lease, a 317-acre leaseholding in the Denver-Julesburg Basin in Colorado, until 31 December 2020.
The group noted this was granted with no additional financial cost and that the delay will allow the company more time to assess market conditions prior to its investment decision.
Rose also maintains its ongoing partnership with the U.S. Department of Energy in order to increase the wider visibility of the area which includes its project in the Paradox Basin in Utah.
Harrington further hailed the group’s work over the last 12 months to restructure the company which he said “has proved to be absolutely critical as we position the company for the future.”
The group said it will mark its full transition with a name change to ‘Zephyr Energy plc’ which is to be announced at its annual general meeting later this year.
"Rose is now positioned as a clean, low-overhead, unlevered and value-focused vehicle from which to build,” Harrington added.
Follow News & Updates from Rose Petroleum here: