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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Atlantic Coal | LSE:ATC | London | Ordinary Share | GB00B142G994 | ORD 0.07P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.09 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS No 4012t ATLANTIS RICHFIELD CO 15th October 1998 ARCO Public Affnirs 515 South Flower Street Mailing Address: Box 2679-T.A. Los Angeles, California 90051 Telephone 213 486 3511 ARCO Announces Cost Reduction Program LOS ANGELES, Oct. 15 /PRNewswire/ -- ARCO (NYSE: ARC) today announced that it will implement a cost reduction program designed to reduce before-tax costs by more than $500 million over the next two years. Approximately $350 million of the cost savings are expected in 1999. The cost reductions will fall largely into four categories: upstream operating and support costs; exploration spending; downstream operating and support costs; and costs for the corporate center and support services. ARCO's increased concentration on core exploration and production areas and the recent divesting of non-strategic assets have facilitated the additional cost reductions. The reductions include the elimination of approximately 900 administrative and technical jobs, most of which are in Los Angeles and Plano, Texas. In addition, the company will close 20 small offices, which are located primarily outside the United States, and downsize a number of other offices. IMPROVING RESULTS "Our goal is to provide high returns to our stockholders," said ARCO Chairman and Chief Executive Officer Mike R. Bowlin. "To do so, we must achieve best quartile performance in everything we do. "A commodity business always needs to control costs," he said. "In the oil price environment that could be with us over the next few years, it is imperative that we continue to pay strict attention to costs. Our cost reduction program goes beyond this and is designed to insure the future financial success of ARCO in whatever business environment evolves. In particular we want to improve our international profitability." UPSTREAM COSTS Upstream cost reductions are expected to comprise about $330 million of the program's two-year commitment of $500 million. This includes approximately $85 million of previously announced cost reductions that will be realized in 1999 as a result of the company's acquisition of Union Texas Petroleum. Of the $330 million, exploration spending will be reduced by $150 million, most of it coming from the international area. Production costs will be reduced about $110 million. Overseas office closures and reductions in the company's international support operations in Plano, TX, will provide another $70 million of the planned reductions. This will include upstream and support a staff reduction of about 530 jobs, of which 450 jobs are in Plano. Commenting on the upstream reductions, Michael E. Wiley, President and Chief Operating Officer said. "Earlier this year we began a restructuring of our international activities to achieve best quartile costs and margins. We are continuing that effort, although not at the expense of future international growth. We are simply balancing our existing portfolio of international projects, our costs and our business development activity with an eye to both current conditions and future profitability." "Fundamentally, we are seeking the same level of performance in our international activities that we have achieved in ARCO's Alaska, Lower 48, and Gulf of Mexico operations," he said. "All of these are best quartile operators." DOWNSTREAM COSTS Downstream costs are expected to fall by about $90 million over the twoyear period. Most of the reduction will be in refining and marketing and will volve additional staff cuts of about 100. ARCO's refining and marketing division has recently completed a profit improvement program that has already reduced costs by $100 million versus 1997. ARCO, Wiley said, is recognized as one of the premier refiners and marketers in the world. CORPORATE AND SUPPORT COSTS The corporate center and support staff costs will comprise $80 million of the total cost savings of $500 million. This will involve reductions of about 270 people, all in Los Angeles. These corporate center and support cost reductions are possible because of the cuts in upstream and downstream operations, the company's greater focus on core businesses and the divestment of several non-strategic businesses. PERSPECTIVE Putting the entire cost reduction program in perspective, Bowlin said, "We are going to improve our profitability while maintaining our ability to grow. We have an ample portfolio of growth projects. Our challenge now is to maximize the value of that growth portfolio along with our existing assets. We are committed to our strategy of being the best performer with significant scale in selected regions." Bowlin said that later this year the company will announce its plans for capital spending as well as the sale of remaining non-strategic assets to complete the restructuring it began in late 1997. In recent weeks ARCO has announced the departure of a number of senior executives, the elimination of its corporate aviation department and the likely consolidation of its Los Angeles basin offices. As part of its strategic plan. ARCO earlier this year sold its domestic ooal operations and its interest in ARCO Chemical while acquiring the Union Texas Petroleum Company. The company is highly focused on its core oil and as businesses with significant operations in Alaska, the Lower 48, the Gulf of Mexico, the United Kingdom North Sea, Indonesia, China, Venezuela and Algeria. (Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. Actual results could differ based on numerous factors including the ability to achieve projected cost reductions consistent with operating requirements, industry and general economic conditions and other risks detailed from time to time in the company's reports to the Security Exchange Commission, including the 1997 report on Form 10-K.) ARCO releases are available at http://www.arco.com on the World Wide Web. SOURCE ARCO CONTACT: News Media: Lee Tashjian, 213-486-2364, or Tom Goff, 213-486-3385, or Investors: David De Sonier. 213-486-1811, all of ARCO/ /Web site: http:/www.arco.com/ END MSCFFMFIIUAUFDS
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