Welcome!

Cognitive Computing Authors: Liz McMillan, Yeshim Deniz, Shelly Palmer, Elizabeth White, Rajeev Kozhikkattuthodi

News Feed Item

Worldview Capital Management: Major Shareholder of Exillon Energy Plc to Requisition Extraordinary General Meeting for Board Overhaul and Strategic Review

LONDON, January 14, 2013 /PRNewswire/ --

Reasons for EGM:

  • Exit from FTSE-250 following share price plummet of over 60% since the $280m placing at 400p in March 2011
  • Board inexperience has led to ineffective management of assets and communication of a distinctly misleading impression of production development
  • Ongoing corporate governance failings and significant underperformance against production forecasts

EGM will call for:

  • Removal of current Chairman
  • Appointment of 3 New Non-Executive Directors well-qualified to review the Company's strategy, assets and operations and contribute to its successful development

Worldview Capital Management ("Worldview"), the Swiss-based investment manager, has begun the formal process of requisitioning an EGM at former FTSE-250 constituent, Exillon Energy plc ("the Company") (EXI.L), an independent oil producer with assets in Northern Russia. Worldview are seeking the removal of Chairman, David Herbert, and the appointment of 3 new Non-Executive Directors.  This follows a more than 60% decrease in the oil firm's share price following the $280m placing in March 2011 and a series of production setbacks. Worldview believe this performance is the result of an inappropriate Board who have implemented a flawed operational strategy and overseen a period of serious corporate governance failings.

Worldview's call for  an EGM comes as a last resort following a period of attempted engagement with the Board since May 2012.

Purpose and role of proposed new Non-Executive Directors

With a clear focus on recovering shareholder value, the proposed new Directors would provide vital operational and sector experience where the existing Board is currently weak.  Worldview have major concerns regarding the Company's current strategy and portfolio management. The new Directors' experience will play a crucial role in developing and executing the most appropriate strategy and driving operational performance improvement, whilst immediately improving corporate governance at the Company.    

Underperforming and inappropriate existing Board

Non-Executive Chairman, David Herbert, and Chief Executive, Mark Martin, were appointed in 2011, without a proper search process, despite both lacking relevant E&P experience.  Under their tenure the Company has experienced production setbacks on two occasions.  In the period from David Herbert's appointment on 28 April 2011 to date the Company's shares have underperformed the FTSE 350 Oil and Gas producers index by 65% and the Russian RTS index by 60%. Furthermore, during this time the Company has also dropped out of the FTSE-250, with the share price falling sharply (from 468p to 146p). In the absence of news of significant progress, Worldview believe that recent share price appreciation is the result of its share purchase programme that took place during the second half of 2012.  

The absence of a Finance Director further demonstrates that the Board lacks the expertise to properly manage the Company's activities.

Flawed strategy and ineffective portfolio management

Worldview believe that the Board has the wrong strategic focus by developing its high risk and less profitable assets in the Russian region of Timan-Pechora, which is diverting capital and other resources away from developing its assets in Western Siberia that have been shown to produce higher returns.

This view has been echoed by Otkritie Capital, an independent firm of brokers covering the Company, who stated in a research report in November 2012: "We do not support the company's aspiration to invest in Timan-Pechora due to the higher drilling costs and lower flow rates than in West Siberia. Nor do we support infrastructure spend ahead of production growth."

Governance failings

Lack of independence

There remain significant questions over the independence of the current Exillon Board. David Herbert and Mark Martin were UK bankers from Exillon's sponsoring investment bank. They were appointed to the Board as Chairman and CEO shortly after a major fundraising by Exillon and sell-down by the principal shareholder, Maksat Arip, of $130 million conducted at the Company's near all time share price high.  

Since that time the role of Mr Arip, who at the time of his resignation as Executive Chairman, was simultaneously appointed CEO of the Company's subsidiary companies has remained unclear. The latest annual report refers to Mr Arip as a "consultant" rather than an employee or by his announced title. Nevertheless, "Mr Arip assisted the Remuneration Committee in its decision regarding the remuneration of Mr. Martin [and] of Mr. Herbert" (Annual Report 2011).

This concern is reinforced by the fact that there appears to be precedent for this type of management manoeuvre by Mr Arip. When he stepped down as Director and CEO of Kazakhstan Kagazy plc ('Kagazy'), a London Stock Exchange-listed industrial group of which he was a principal shareholder, Mr Arip continued to hold the position of Director of its principal operating subsidiary "in order to focus [his] time on the strategy and business development of the Group" and that he would "continue to perform the same duties as [he had] to date". (Kagazy RNS 30 April 2008). Having raised $250 million on IPO in 2007, Kagazy is understood to still be negotiating restructuring terms with its creditors that have been ongoing since it first defaulted on over $100 million of bonds in November 2009 (Mr Arip having resigned as Director of Kagazy's principal operating subsidiary in July 2009 and disposed of his entire interest in Kagazy in September 2009 (Kagazy RNS 24 September 2009). Moreover, there are concerns that there may have been inadequate and misleading disclosure in Exillon's most recent prospectus regarding the Kagazy debt restructuring.

Misleading production figures  

Worldview believe that the Company's recent production announcements continue to be misleading.  As a case in point, they regard the announcement on 7 January 2013 detailing 2012 production results as exemplifying this concern. Worldview notes the inclusion of data in the year end production report for "peak production". Peak production is not a performance indicator that is in accordance with industry norms or best practice and in Worldview's view is easily manipulated and therefore cannot be used to suggest that the Company has met its production targets for 2012. The reality is that the actual average daily production has in fact fallen below guidance for both the full year (12,862bopd vs 14,303bopd or minus 10%) and for the final quarter of 2012 (15,218bopd vs 17,398bopd or minus 13%). In addition, it is well below the forecast average daily production from proven reserves as projected in the Company's independent geological report in February 2012 (12,862bopd vs 18,760bopd or a 31% shortfall).

FSA Fine

The issue of governance was brought into sharper focus in April 2012 when Exillon was fined £292,950 by the FSA for its failure to identify and disclose payments of almost £1 million to Mr Arip whilst he was Executive Chairman.

Breach of listing rules/ misleading information

Other corporate governance issues that shareholders are eager to see addressed include numerous examples of non-disclosure of key investor information such as the Company's prospectus and an accurate biography of its Chairman. During the appointment of Chairman, David Herbert, his previous Chairmanship of AIM-listed Timan Oil and Gas - a company that lost 88% of its value following its LSE AIM IPO under his stewardship - was not disclosed.

Remuneration

Worldview is also demanding to know why a remuneration package was agreed for CEO, Mark Martin, which included a salary of $825,000 p/a plus benefits - almost three times the amount of his predecessor - and a share package worth over £10 million at the point of issues, without any performance-related conditions.

EGM request and call for change

Worldview Capital Management, a significant shareholder in Exillon, has begun the formal process of requisitioning an EGM in the conviction that the introduction of new, qualified and experienced Board members, including two independent candidates who were identified following a thorough and professionally run search process, can address the issues currently undermining Exillon's operational and share price performance.

Restoring shareholder value - addressing strategy, portfolio management, executive and Board leadership, eliminating governance failings and assessing and improving operational performance.

Worldview is proposing the introduction of three new Board members with the relevant experience to evaluate the current operational strategy and ensure corporate governance standards in order to help realise the true underlying value of Exillon's assets and restore shareholder value.

Proposed Non Executive Candidates

Yves Mérer - Highly experienced oil executive with significant emerging market experience and a wealth of international oil and gas experience acquired over a 30-year career with Shell that included:

  • Governance of Shell's regional business  interests in French-speaking West Africa
  • General Manager of Salym Petroleum Development in Siberia, Shell's first successful  E&P Russian joint venture business
  • Chairman of Shell Syria
  • President of Shell China Exploration and Production
  • Shell Iran Country Chairman

He is currently Chief Executive of Caithness Petroleum, a privately owned, British independent oil and gas exploration and production company.

James Dewar - Qualified chartered accountant with 30+ years of experience in senior international roles

  • Held a number of Vice President and global/regional business CFO and finance roles for BP in the UK, Dubai, Kuwait, Indonesia, Singapore and the United States of America in multi $ billion businesses during a 27 year career.
  • More recently, Mr Dewar was Group CFO for Dana Gas PJSC, based in the United Arab Emirates, an upstream and mid-stream gas company with assets of $3 billion, quoted on the Abu Dhabi Stock Exchange. He then served as interim transformational CFO for Seven Energy International in 2011.   

He is currently a Non-Executive Director of East West Petroleum Corporation (TSX.V: EW), sits on the Advisory Board for Viking Services and is a Non-Executive advisor to Atlantic Energy, a privately owned UK and Nigeria based energy company.

Andrey Kruglykhin - Founding Partner and Chief Compliance Officer of Worldview Capital Management with significant oil and gas and turnaround experience in companies with management and governance failings, minority shareholders' rights, and corporate governance

  • More than 15 years' experience in the oil & gas industry and financial sector - currently Partner and Chief Compliance Officer at Worldview Capital Management;
    • Other current roles include as Executive Chairman at Bulgarian Stock Exchange-listed ELARG Agricultural Land Opportunity Fund REIT;
    • Has worked in advisory roles in the asset management industry since 2006, managing complex turnaround situations in Eastern Europe and Central Asia;
    • Previous roles include as Senior Advisor with QVT, Senior Advisor at ING Bank, London, CEO of Petrol Holding in the Bulgarian part of Naftex Group, a downstream oil company with an annual turnover of more than €500m and Deputy Director of Business Development at RITEK, a Russian upstream oil company;
    • Holds a PhD in Petroleum Economics from Gubkin Russian State University of Oil and Gas, Moscow; MSc in Physics from the Moscow Institute of Physics and Technology (University); Certificate in Crisis Management; CDip AFAskeri-ACCA; attended the Trium Global Executive MBA program issued by LSE, NYU, and HEC.

Worldview Capital Management Partner and Chief Compliance Officer, Andrey Kruglykhin, said:

"We have invested significantly in Exillon and currently control 13% of the Company's shares. This reflects our view that Exillon has a number of attractive assets, which have the potential to deliver significant returns. The proposed new, experienced team at Board level will bring about the vital changes needed to unlock the true value of these assets. It is for this reason that we have informed the Company that we are requisitioning an EGM, having been unable to constructively engage with the Board since May 2012.

We believe that now shareholders are in full possession of this information, and have a clear opportunity to remedy the situation and restore shareholder value, we can count on their support to vote for these changes."

Notes to Editors:

Worldview Capital Management is an investment management group based in Switzerland and UK (FSA authorised), which controls votes of more than 13% of the share capital of Exillon Energy.

http://www.worldviewcap.com

Enquiries:
Hudson Sandler: Charlie Jack/Andrew Hayes/ Charlie Barker
+44(0)20-7796-4133


More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
DevOps at Cloud Expo – being held June 5-7, 2018, at the Javits Center in New York, NY – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Among the proven benefits,...
@DevOpsSummit at Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, is co-located with 22nd Cloud Expo | 1st DXWorld Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
SYS-CON Events announced today that T-Mobile exhibited at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on qua...
SYS-CON Events announced today that Cedexis will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Cedexis is the leader in data-driven enterprise global traffic management. Whether optimizing traffic through datacenters, clouds, CDNs, or any combination, Cedexis solutions drive quality and cost-effectiveness. For more information, please visit https://www.cedexis.com.
SYS-CON Events announced today that Google Cloud has been named “Keynote Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Companies come to Google Cloud to transform their businesses. Google Cloud’s comprehensive portfolio – from infrastructure to apps to devices – helps enterprises innovate faster, scale smarter, stay secure, and do more with data than ever before.
SYS-CON Events announced today that Vivint to exhibit at SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California. As a leading smart home technology provider, Vivint offers home security, energy management, home automation, local cloud storage, and high-speed Internet solutions to more than one million customers throughout the United States and Canada. The end result is a smart home solution that sav...
SYS-CON Events announced today that Opsani will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Opsani is the leading provider of deployment automation systems for running and scaling traditional enterprise applications on container infrastructure.
SYS-CON Events announced today that Nirmata will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Nirmata provides a comprehensive platform, for deploying, operating, and optimizing containerized applications across clouds, powered by Kubernetes. Nirmata empowers enterprise DevOps teams by fully automating the complex operations and management of application containers and its underlying ...
SYS-CON Events announced today that Opsani to exhibit at SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California. Opsani is creating the next generation of automated continuous deployment tools designed specifically for containers. How is continuous deployment different from continuous integration and continuous delivery? CI/CD tools provide build and test. Continuous Deployment is the means by which...