Energy XXI Gulf Coast Inc (NASDAQ:EXXI) announced that it is cutting 18% of its workforce in an effort to stem the bleeding as it combats weak oil prices, falling demand, and a global glut of crude.
The Houston-based oil producer emerged from an eight-month bankruptcy in December and had 237 employees at the end of 2016. The company said the job cuts would result in $2.5 million in severance costs in the second quarter, but would save the company about $8.5 million annually in general and administrative costs.
Douglas E. Brooks, EGC’s chief executive officer and president, stated, “While we continue to develop our long-term strategic plan, our near-term commitment to HSE excellence, minimizing base production decline and reducing operating and overhead expenses remains unchanged.”
“The reductions in force are difficult but we are in a challenging commodity price environment and we must better align and manage our costs through this time to better position EGC and allow us to be more competitive in the long-term,” Brooks concluded.
Back on December 30, Energy XXI announced that it successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy. Through this process, Energy XXI improved its financial position by eliminating more than $3.6 billion of debt from its balance sheet.
Then-President and Chief Executive Officer John D. Schiller, Jr. said, “Today, Energy XXI is a stronger company, and we are focused on operating efficiently and utilizing our financial flexibility and strong competitive position to create sustainable, long-term value.”
Schiller continued, “Energy XXI benefits from having the best employees in the industry, and the successful completion of this financial restructuring process is a testament to their hard work.”
Energy XXI is an independent oil and natural gas development and production company with properties in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. It currently operates nine of the largest oilfields on the Gulf of Mexico Shelf. The company has total proved reserves of 121.9 million barrels of oil equivalents, of which 78% is crude and 70% was classified as proved developed.
Energy XXI operates or has an interest in 616 gross producing wells on 439,294 net developed acres, including interests in 57 producing fields.
“Energy XXI Gulf Coast Provides Operational Update,” Energy XXI, June 14, 2017.
“Energy XXI Successfully Completes Financial Restructuring,” Energy XXI, December 30, 2016.
“About Us,” Energy XXI, last accessed June 15, 2017.