Oil exploration company Providence Resources is to lay off nine of its 13 staff, following a strategic review of its operations.

The company is also to slim down its board, with four of its members set to either step down or not seek re-election at the next AGM.

John O'Sullivan, the company's Technical Director, will step down with immediate effect.

It will also vacate its current Dublin office in the last quarter of this year when the lease expires and move to a smaller serviced facility in Dublin.

The use of various service providers and advisors will also be reduced, it said in a statement to the stock market.

The measures will, it predicts, reduce the annual cost base of the business excluding capital expenditure to $1.9 million from $5.3 million currently.

Providence said the "re-engineering" would ensure that its business model continues to be "fit for purpose" and would reflect the changes evident in its operating environment.

The company's share price, which has been under pressure in recent months, fell over 30% in London on the news.

The business has been under pressure to reduce costs in line with the changes to its business model.

Recent changes in the way the company operates include the farming out of the majority of its exploration, leading to a much-reduced technical role for the firm and the transfer of operations of most of its key assets.

It also said the changes reflect the fact it is not a revenue generating business and that the past two years of working capital have been financed solely through the completion of farm-out deals with third parties.

Providence said it has engaged in a consultation process with its staff and its board and the changes are conditional on the company having sufficient working capital to bring about the necessary changes.

The firm also said that if a promised $9 million loan is not received by 12 August, then it will need to put in place alternative financing arrangements for working capital beyond the end of August.

Currently it has cash in the bank of approximately U$1.45 million.

A final deadline for receipt of the $9 million loan, which has been extended several times, was again put back today after the latest backstop date was missed.

The money, which is coming from China’s APEC Energy Enterprises under a farm out agreement, is to cover exploration costs for its Barryroe project.

The Barryroe prospect lies in about 100 metre water depth in the North Celtic Sea Basin, about 50km off the south coast of Ireland.