CARPINTERIA, Calif.-- June 6, 2001--Benton Oil and Gas
Company today announced it intends to reduce its U.S. based annual corporate G&A
expense about 50 percent from $8 million to approximately $4 million and relocate its
Carpinteria, California corporate office to Houston, Texas. The transition is to be effective
June 15, 2001, and will be substantially complete by the end of the third quarter. The new
Houston office will be streamlined and consist of senior staff with key foreign asset technical
operations and accountability transferred, in large part, to the Company's offices in Maturin,
Venezuela; and Western Siberia and Moscow, Russia. Going forward the Company intends
to enhance its technical capability in both Venezuela and Russia.
President and Chief Executive Officer Dr. Peter J. Hill said, "These actions represent the next step in our drive to improve the margins and the balance sheet of the Company. The debt restructuring plan presented to the market last week should enhance financial flexibility while, in turn, providing a better opportunity to exploit the value of our asset base. The relocation and redefinition of our headquarters office moves us toward our goal of lowering G&A expense to more competitive levels."
Dr. Hill continued, "It is, however, very sad for us to be losing a lot of staff who have worked hard, been loyal and served the Company extremely well over the past years. Benton will take a nonrecurring charge in the second quarter of $1.0 million to $1.5 million for estimated severance and transition costs. We expect to recoup this reduction and relocation expense by the end of the 2002 first quarter through lower future costs."
Dr. Hill said, "Many former in-house technical and commercial services will now be handled locally or outsourced. Benton's highly experienced, mostly new senior executive team will spend considerable time in foreign operational centers. The new office structure excites me in that we will be much more cost-effective, hands-on and involved with our asset teams in Venezuela and Russia, all of which is aimed at improving the value of the asset base for our stakeholders."
Benton Oil and Gas Company, headquartered in Carpinteria, California, is an independent oil and gas exploration and development company with principal operations in Venezuela and Russia.
This press release may contain "Forward-Looking Statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this release may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Actual results may differ materially from the Company's expectations due to changes in operating performance, project schedules, oil and gas demands and prices, and other technical and economic factors.