Australian underground coal gasification specialist Linc Energy will shed 60 jobs across the company as part of a cost-cutting drive, it said in a statement Wednesday.
Around 90% of the jobs will be lost in the company's corporate and clean energy divisions.
"It is worth noting that many of the budget cuts were completed in the company's Denver and Casper offices on the back of the consolidation of the company's oil operations, which are now being run out of Houston, with further cuts actioned in the Brisbane [Australia] office," the company said. "Following the restructure, Linc Energy continues to employ over 400 employees across Australia, USA, Europe and Uzbekistan."
The one-off cost associated with the layoffs will be around A$500,000 ($513,000). Linc's average quarterly cash burn, excluding the oil and gas division which is self-funding, will be reduced from around A$38.2 million to about A$19 million in 2013 as a result of the cuts, the company said.
Linc's US oil and gas business is producing at about 4,000 b/d gross, but is expected to increase output to more than 7,000 b/d by the third quarter of the fiscal year ending June 2013. At current output, the division's annual earnings before interest, tax, depreciation and amortization top A$65 million.
The increased oil output and cost cuts are expected to leave Linc cash-positive to the tune of A$15 million in fiscal 2013, the company said.
Linc has developed an underground coal gasification and gas-to-liquids project over the past five years at a pilot project in Chinchilla in the eastern Australian state of Queensland. The company recently agreed a joint venture with GCL Projects, a subsidiary of Hong Kong-based Golden Concord Holdings, to build its first multi-gasifier project in China.
