CALGARY, Alta. — Aveda Transportation announced it is taking further cost-cutting measures and seeking a new president and CEO as it adjusts to a prolonged downturn in the oil and gas industry.
The oilfield hauling services provider said in an update that rates in the oilpatch being offered by competitive oilfield service companies are often not sustainable.
“Many bids are being lost due to competitors creating unsustainable pricing pressures for the industry and pricing services at levels which would generate negative gross profit margins,” Aveda said in an update for investors.
The company says during the third quarter it eliminated 51 jobs, including corporate positions in Calgary and Houston. It closed its branch in Mineral Wells, Texas, where only four rigs are currently operating. It also merged its Cherokee, Ok. and Oklahoma City branches. This should save about $5 million per year, the company projects.
Aveda said it has lost about $3.3 million in July and August combined and expects further losses in September.
“Adjusting to the current economic climate has been an arduous task. We, like many other oilfield service companies are making the difficult decisions to be successful in our new reality,” said David Werklund, executive chairman of Aveda. “We sincerely appreciate the support of our people as we make the necessary changes for Aveda’s future growth and success.”
The company is also consolidating most of its Houston corporate office with its Calgary head office. CEO Kevin Roycraft is leaving the company and a search is underway for his replacement. In the meantime, Werklund will serve as interim president and CEO, the company announced.
Roycraft is staying on to assist with the transition until Nov. 6.