RAWSON Resources has announced its intention to cut back on spending in light of the current market conditions.
The Sydney-based company which has near-term production assets in South Australia’s Cooper and Otway basins, told shareholders in an October announcement that it had undertaken a strategic review to “improve cost efficiencies and reduce cash outflow.”
Rawson now plans to fund all exploration and appraisal commitments over the next 12 months from existing cash reserves, which as of the end of June stood at $901,000, down from $1.96 million at the beginning of the June quarter.
The company plans to halve staff costs following the review, with other corporate overheads to be removed or significantly reduced.
“The company remains focussed on progressing discussions with potential partners for our Otway basin assets and we look forward to having the Udacha gas field come online during the first half of 2015,” Rawson said.
Rawson directors also plan to accept over 60 per cent of their fees as equity in lieu of cash, pending shareholder approval.
These changes are expected to take effect by the end of November.
Oil & Gas Australia was waiting for further information from Rawson on the cost cutting initiative at the time of deadline.
At the end of July, the company closed its data room for the proposed Otway basin farm-out where it had been searching for an equity activity partner.
While no material deal has been undertaken, Rawson is continuing discussions with several companies
“We remain positive about securing a strategic partner to help us fund future exploration drilling,” the company previously said.
The company owns two petroleum exploration licences and one petroleum retention licence in the Otway basin, which boasts larger producers and explorers such as Beach Energy.