BEACH Energy will cut jobs and made the majority of its Sydney-based staff redundant following its takeover of Drillsearch Energy, the company announced.
These were part of an estimated $40 million in savings the company expects to make following the acquisition, due to the termination of contractors and consultants and the cessation of Drillsearch board fees, in addition to savings from the Sydney office closure.
Beach would have a headcount of 213 by 30 June 2016, the company said, 88 fewer than the companies had between them at the same time in 2015.
Company acting chief executive Neil Gibbins said merger synergies between Beach and Drillsearch had exceeded original expectations.
“The results achieved to date make the combined business a leaner, more robust operation,” he said.
“The merger has strengthened our ability to weather current market volatility and better positions us to take advantage of a future improvement in conditions.”
Capital expenditure for the combined company in 2015-2016 will be within the previous guidance of between $180 million and $200 million, Beach said.
But production was expected to be higher, now between 9.5 million and 9.8 million barrels of oil equivalent, up from the previous guidance of between 8 million and 8.6 million barrels.
Mr Gibbins said the merger had allowed Beach and Drillsearch to rationalise the operation of its flagship Western Flank oil and gas permits,
“Pleasingly, it has become clear that the existing Beach resource levels are capable of operating the combined portfolio of assets.”
“This has allowed us to accelerate cost‐out initiatives, with our initial synergy estimate already exceeded.”