Trinidad Drilling has conduced a review of its cost structure going into 2018 and has made the decision to reduce headcount and roll back salary and benefits for execs and board members in to improve its returns.
The company has reduced its general and administrative spending guidance for the year to $43 million from $53 million previously announced in late 2017. That’s down from an estimated $58 million in 2017, $57 million in 2016 and $63 million in 2015.
Trinidad increased its 2017 G&A expense expectation to $58 million from $56 million as a result of higher than expected professional fees and increased salary costs associated with higher activity levels and its $30 million acquisition of RigMinder in August.
The Calgary-based company said the majority of the new headcount reductions will impact its corporate office.
As part of the cost cutting and restructuring efforts, US operations executive vice-president Randy Hawkings will step down but continue to consult with the company, Trinidad said.
Cost-cutting initiatives also include a 15 percent reduction in executive salaries and directors’ board fees.
Trinidad said it is currently reviewing its operations for additional opportunities to create efficiencies, including a review of under-utilized facilities for further cost savings or potential asset sales.
“Trinidad believes that its new and prior initiatives improve the efficiency of the company and position it as a cost-efficient drilling contractor with one of the lowest cost structures in the drilling sector,” the company said.
Meanwhile, Trinidad said that oil and gas producers have “expressed strong interest” in its roll out of RigMinder’s technologies, which are designed to drill wells more quickly and efficiently, resulting in reduced costs.