Senex Energy sheds 30 staff as part of cost cutting

Senex Energy has shed 30 employees and will reduce capital expenditure by 20 per cent in the 2015 financial year, as part of cost-cutting in the wake of the plummeting oil price.

The redundancies, comprising about 15 per cent of the mid cap oil company's staff, were made on Tuesday with immediate effect, Senex managing director Ian Davies told investors on a conference call.

"It's regrettable that in times like this these things need to happen," Mr Davies said on the call, arranged to discuss Senex's response to the slump in oil prices and its December quarter results.

"We expect to ride the peaks and troughs of this market."

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Mr Davies said Senex had reacted rapidly to the price plunge, putting in place hedging to protect cash flows through the rest of this financial year and making cost savings amounting to $6 million a year on an annualised basis.

Capex in 2014-15 will be reduced $85 million to $90 million, down from the original budget of $100 million-$120 million, with higher-risk exploration spending being delayed and the focus going on investment that enhances production. Just 16 wells will be drilled in the 2014-15 drilling program, down from 26. Production guidance for the full year of at least 1.4 million barrels of oil equivalent isn't affected.

Mr Davies had been flagging that Senex would tighten its belt in the wake of the plunge in global crude oil prices to their lowest level since April 2009. The price weakness has already caused larger rival Santos to slash $700 million from its capex budget for the 2015 financial year, while Woodside Petroleum also advised last week of cutbacks.

"We have a very large portfolio of growth projects with long-term tenure," Mr Davies said on Wednesday. In this environment, we must continue to show discipline in the prioritisation of these projects.

"The right sizing of our spending program, in combination with our recently implemented hedging program, will ensure we preserve our strong funding position and exit FY15 in a strong net cash position."

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Senex Energy sheds 30 staff as part of cost cutting