- Cathedral Energy Services Ltd (TSX:CET) is implementing further cost-cutting measures due to the low price of oil affecting the industry at large
- The company has cut its CEO and EVP salaries by 25 per cent, and has reduced staffing levels by 22 per cent
- The remaining non-field staff have taken a 20 per cent pay cut and will work a four-day week until further notice
- The oil price crashed earlier this year and is continuing to be depressed by COVID-19’s effects on global demand
- Before the market opens, Cathedral Energy Services Ltd (CET) is trading at C$0.10, with a market cap of $4.95 million
Cathedral Energy Services Ltd (TSX:CET) is implementing further cost-cutting measures due to the low price of oil affecting the industry at large.
The oil price crashed earlier this year when negotiations between a number of OPEC nations and Russia broke down, and oil production was uncapped.
This flooded the market and drove the common oil price benchmarks, The Brent Crude and The West Texas Intermediate, to historic lows. Despite oil negations recommencing earlier this month, the oil price has remained low.
This is largely caused by two factors. Firstly, the previously unpacked oil production has been stockpiled and continues to inflate supply chains.
Secondly, the effects of COVID-19 on industries globally has negatively impacted the demand for oil, particularly in the aviation industry.
As a result, oil companies are facing a perfect storm, an oversupplied market experiencing lower-than-expected demand.
For Cathedral Energy, this means severely reducing its expenditures and outlook until oil prices return to normality.
Toward this end, the company has cut its salaries substantially. CEO and EVP wages have been reduced by around 25 per cent.
Furthermore, Cathedral has reduced its staff by 22 per cent. The remaining non-field staff have taken a 20 per cent pay cut and will work a four-day week.
The company is also no longer matching retirement saving for its employees, until further notice.
On the operational side, Cathedral Energy has suspended all non-essential travel, as well as all motor repairs at its Saskatchewan facility.
Before the market opens, Cathedral Energy Services Ltd (CET) is trading at C$0.10, with a market cap of $4.95 million.