Edinburgh-headquartered Capricorn Energy is set to slash its UK operations and is "reviewing its UK office space requirements" as part of a strategic review following its abandoned merger with Israeli gas group NewMed.
The company is entering into redundancy consultations with approximately 120 of its 238 global employees. Once finished, Capricorn said its expects to have less than 40 people working in the UK.
As a result of the reduced headcount, Capricorn is reviewing its office space requirements "to align to the expected size of the renewed organisation".
The move comes in the wake of a shareholder revolt that derailed the previous executive team's proposed deal with NewMed, triggering the departure of seven board members. The new board has decided to focus on the company's operations outside of the UK.
READ MORE: Capricorn pulls the plug on controversial NewMed merger
"In the earliest days of the strategic review, the board concluded Capricorn's near-term strategic focus should be primarily on Egypt, and to farm down, monetise or exit exploration concessions outside Egypt," the company said in a statement released yesterday afternoon.
"As a result, Capricorn will need a substantially reduced headcount in the UK and will therefore shortly enter a redundancy consultation process which is expected to result in an organisation of less than 40 people in the UK. Capricorn anticipates the majority of these changes will be made in the coming two months."
Previously known as Cairn Energy, Capricorn unveiled the deal with NewMed in September of last year, replacing a proposed transaction with Tullow Oil. A prolonged shareholder revolt led by Palliser Capital forced the exit in January of seven Capricorn directors, including former chief executive Simon Thomson.
READ MORE: NewMed merger 'significantly' less likely as Capricorn caves in
A vote on February 1 saw Chris Cox, Maria Gordon, Richard Herbert, Hesham Mekawi, Tom Pitts and Craig van der Laan join Capricorn's board of directors. Mr Cox is currently leading the company as interim chief executive.
Two previous directors remain in place, Catherine Krajicek and Erik Daugbjerg.
The company is due to issue its year-end results on April 27, at which time it will provide further details on its strategic review. Shares in Capricorn closed yesterday's trading 2.8p lower at 233.2p.
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