API Journal Authors: Yeshim Deniz, Liz McMillan, Elizabeth White, Ruxit Blog, William Schmarzo

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.


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.


Hudson Sandler: Charlie Jack/Andrew Hayes/ Charlie Barker

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 Open Connectivity Foundation (OCF), sponsor of the IoTivity open source project, and AllSeen Alliance, which provides the AllJoyn® open source IoT framework, today announced that the two organizations’ boards have approved a merger under the OCF name and bylaws. This merger will advance interoperability between connected devices from both groups, enabling the full operating potential of IoT and representing a significant step towards a connected ecosystem.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and...
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining senso...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this ...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, discussed how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technologi...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, will discuss the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docke...
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...