Stone Energy Corporation confirmed in a June 9 press release that it is has again reduced its workforce, saying the undisclosed number of cuts will result in a 25 percent decrease in salaries, general and administrative cash costs for the second half of the year. Last year the company reduced SG&A by approximately 50 percent.
The independent oil and gas producer, which is headquartered in Lafayette, did not specify how many workers will lose their jobs or take salary reductions, or which offices will be affected. Stone Energy also operates in New Orleans and Houston.
The workforce reductions follow years of sluggish oil prices, a decline that took hold in mid-2014. At that time, Stone (NYSE: SGY) employed approximately 400 workers; by the end of 2015, it had cut 100 of those positions. In August it confirmed another 45 job cuts.
The company emerged from Chapter 11 bankruptcy in February and said in April that it had retained Petrie Partners LLC to assist its board with determining the company’s strategic direction.
Stone also announced on June 9 that it had begun drilling operations on its Rampart Deep Prospect in Mississippi Canyon Block 116.
The Stone generated prospect will be drilled and operated by Deep Gulf Energy III, LLC, and is expected to be tied back to Stone’s 100% owned Pompano platform, if successful. The prospect, which targets the Miocene interval, is located nine miles from the Pompano platform and is estimated to take two months to drill. After a sell down of a portion of its position, Stone holds a 40% working interest in the well and received leasehold and other reimbursable costs. Additional working interest owners are Deep Gulf Energy III, LLC with 30% and entities managed by Ridgewood Energy Corporation (including Riverstone Holdings, LLC and its portfolio company ILX Holdings III, LLC) with 30%.
“The Rampart Deep well is an important step in Stone’s forward plans,” interim Chief Executive Officer and President James M. Trimble said in the release. “A successful test of the Rampart Deep Prospect could lead to a multi-well development program, with a tie back to our Pompano platform further leveraging this facility. Partnering with Deep Gulf Energy and Ridgewood on this well reflects our renewed focus on efficient use of capital, and the reductions in SG&A reflect our continued commitment to manage our costs to better position Stone to be competitive in the current commodity price environment.”