First Colombia Gold Corp (OTCMKTS:FCGD) said that the company has considerably reduced its overheads and other expenses of producing oil from current leases. In January, the company commenced its restructuring business plans to cut labor expenses, reduce overhead and streamline production cost. After completion of its restructuring measures where it controlled labor cost and overhead expenses, it stated that production costs are reduced to under $25 per barrel.
The management view
Jason Castenir, the CEO of First Colombia said that the latest progress is the evidence that how profitable the company can be. He added that most of the other companies of same size have a massive amount of debt and overhead. At the same time, First Colombia doesn’t have any such problems. The company has successfully restructured operations in a meaningful way to report a low extraction cost. It appears as the right time to benefit from the low oil market to go for additional acquisitions in the industry.
Clarence Parks, the President of First Colombia Gold Corp (OTCMKTS:FCGD), said that with oil prices trading at multi-year lows, the management had to reduce production costs. The success in restructuring activities has enabled the company to produce oil and maintain revenue. It sets the company apart from its competitors. The need is to succeed even in the weak market.
The other details
Earlier in January, First Colombia reported that it will concentrate on oil services along with its measures to reduce overheads. The focus will shift on the production and maintenance activities on existing wells. For sometime, it will scale back its exploration and drilling operations. The measures also included certain employee layoffs. Castenir stated that due to the continued declining oil prices, the management has executed a plan to achieve profitability while reducing overall costs and overhead. On Friday, FCGD stock surged more than 5% in early trade.