Turnaround of an Exploration & Production Company
An exploration and production company with a diverse portfolio of assets in East Texas, South Texas, Louisiana, Wyoming, and California had recently emerged from bankruptcy. Following the restructuring, several debt investors and hedge funds had taken control of the company. The owners sought to de-lever the company via asset divestitures and cost reductions. We were retained to assist the company’s executive team throughout this process.
Approach
Working in partnership with leadership, we assessed the company’s performance and identified opportunities for improvement, while also evaluating the portfolio and potential divestment candidates. Our approach included:
- Benchmarking the cost structure and performance
- Identifying opportunities to reduce general and administrative (G&A) expenses
- Designing and implementing a lean organization structure
- Assessing lease operating expenses (LOE) and identifying savings opportunities
- Project managing the asset divestiture process in partnership with an investment bank
- Advising management throughout the divestiture process
- Aligning executive and employee compensation programs to shareholder goals
- Providing advisory support to leadership and the Board
Key Results & Outcomes
By streamlining the organization structure, we reduced total headcount and cash G&A by 25% and 30%, respectively. We deployed consultants to the field to engage with operations and supply chain personnel. These efforts resulted in LOE reductions of ~15%. We worked with management to build a clear understanding of portfolio and strategic options and developed a 1-year strategic plan. We managed the process to sell non-core assets and improve the balance sheet. As the Board elected to make selected leadership changes, we advised about potential candidates and assisted with onboarding.