Ithaca Energy has sunk to pre-tax losses of £944million due to the “historic collapse” of oil and gas prices brought on by Covid-19.
The Aberdeen-headquartered operator said in its first quarter results that the commodities crash resulted in it taking impairments of £646m on its assets.
As part of cost cutting measures, Ithaca Energy revealed it is aimng to reduce its onshore headcount by 25% through a “voluntary leavers programme” launched in April, while also reducing its use of contractors.
Ithaca currently has 280 people working at its Aberdeen base and previously warned of “redundancies” as a result of the downturn but did not disclose figures.
The process is expected to be completed in the third quarter.
The firm, which last year completed a £1.6billion deal for Chevron’s North Sea assets, is aiming to cut operating costs by 15% in 2020, meaning delays to a number of projects.
BP’s Vorlich field, which Ithaca holds a 34% stake in, has been delayed from mid-2020 start-up to the fourth quarter due to the virus.
Although “strong progress” has been made on subsea installation, the virus has hindered remaining construction work, Ithaca said.
Vorlich is a two-well tieback to the FPF-1 vessel in its Greater Stella Area.
Elsewhere, Ithaca already forecast in April that its Alba infill project would be deferred.
Timing of work on the Captain enhanced oil recovery project and Grater Stella Satellite projects like the Hurricane well have also been hit.
Ithaca said future hedging of prices worth £415million had offset some of its oil price-related impairments.
Meanwhile production for the first six months of the year is expected to average 72,000 barrels of oil equivalent per day (boepd), ahead of initial guidance on 63-68,000.
The company posted first quarter revenues of £283m, up from £87.5m in the same period last year.