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Assuming this was a voluntary decision by Phil, then I would assume the following:
- He has lived on an airplane for many years and is just tired of the task at hand…and feels that the final stretch is upon us and IOC no longer needs his leadership….if this is true then..
- I believe he would have waited until the deal was closed, unless the time to close is much further out than we are led (or choose) to believe. Possible, but not likely…he’s worked this too hard too long to quit now.
So I agree, this was an involuntary retirement…
And I’d argue that the BoD must have had this option in its’ collective hip pocket for some time. (i.e. they had planned this route if Phil didn’t choose the “right” direction/sell down partner(s) for IOC (this didn’t just happen over 1 board meeting or 1 weekend…must have been well orchestrated over some months)). A few possibilities on why now:
- A particular deal required Phil’s resignation…but why? Any super major that takes over as operator would not care who the non-operated partner CEO was..makes no sense.
- PNG required Phil’s resignation…Certainly plausible. But seems unlikely…they just want a super major / particular partner. More possible that PNG wanted an Operator that Phil wouldn’t agree to (i.e. Shell)…and so perhaps…
- Phil objected to the deal favored by the PNG AND perhaps in the end the BoD. Most plausible. Perhaps the best deal is a 50% Operator stake in all licenses across IOC acreage…and this would require giving up complete control..something Phil resisted. So 3 possibilities: 1. Perhaps he resisted to the deal in terms of what it meant (i.e. giving up control of IOC exploration…no matter who the operator in this case may be) OR 2. who it meant (Shell?) would operate and/or 3. how much working interest they wanted (% Stake up to 100% or full buyout) in Elk/Antelope or all exploration licenses.
- Sell down prices not high enough for Phil? Maybe so…perhaps a combination of this plus the others above. Perhaps…so Phil may have recommended no action at this time (wait longer for another opportunity to do a deal???). possible.
- Negotiations have been mismanaged and the process must be reset – so Phil is “retired” as he pissed off potential partners and the new CEO will get the train back on its’ track. This would reset the timing of any deal(s) and bring to question lots of issues. The stock is trading like this is NOT the case. Admittedly, if we were down on heavy volume, I’d be more concerned with this…but the fact that it’s up 3-4 points today (from the pre-market gap down)…then in my mind today is extremely positive trading day.
- BoD wasn’t pleased with Phil’s performance, so this is just a random CEO change-out. Not likely. This wouldn’t explain why now on the presumed eve of a deal. As an oil and gas finder…hard to dispute his success; but as a deal maker and communicator…certainly has been a challenge. Looking back even into the 2012 earnings releases: IOC slides still showing that IOC was “FID Ready”. i.e. while they had initiated (at least stated publicly) a process to get a super major, there were still efforts to not relent or relinquish operatorship and the EWC/Mitsui concept didn’t go away without a fight.
From a corporate governance perspective, I’m really curious if the BoD needs the CEO’s recommendation in order for it to approve a deal. If so they would need Phil’s affirmative vote or recommendation as CEO of IOC to approve a deal. Otherwise they have nothing to approve or reject. The underlying assumption here is that it did need his recommendation…and either the new CEO will (in the future) recommend a deal that the BoD can approve or Phil already did upon a condition of his “retirement”. Gotta wonder at what point the BoD recognized that Phil would not conform to the best deal for the shareholders. From a corporate governance standpoint, I’m unsure of how this works…but if my assumptions are correct then either:
Under BoD pressure, Phil approved and “recommended” the deal preferred by the BoD after being voted out as CEO in conditional exchange for allowing the deal to be completed on his watch (by April 30) OR
Phil did not and would not recommend the preferred deal, and the new CEO must wait until May 1 to recommend a deal to the BoD for final approval.
I believe it’s the previous and that the Shell rumor is true and it’s a bigger deal than just Elk/Antelope: either IOC buyout or operated stake in all licenses…and if this is true, then deal will be done by April 30th.
Lots of assumptions: stock price and volume the last 2 days is indicative that the shareholders will benefit, no matter the reason Phil retired as CEO now.
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Petro -
I'll make it simple. RDS made an offer for a share of 236, 237 and 238 that Phil thought was so low-balled he could not in good conscience agree to it. Consequently he fell on his sword. We may or may not soon find out. If I were a betting man this is yet another episode of "Que sera, New Guinea Style". As Sleuth use to say, 'later, rather than sooner'.
