“enhanced procedures for reporting reserves and discoveries”.
Seriously. What is this exactly? JFT already does this!
Phil's actions only make sense if he's sniffed 'sinister'.
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Mulacek moves on InterOil board |
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Monday, 4 April 2016
INTEROIL founder and one of its largest single shareholders, Phil Mulacek, has launched a rocket at the Papua New Guinea-focused company’s board, demanding that the company cut the number of directors on the board from and limit compensation.
Mulacek, who used to lead InterOil as CEO, wants to limit total cash compensation for all directors to $600,000 annually to "better align the interests of the directors with the interests of the shareholders".
He has also proposed the company should also require at least 50% of directors’ total compensation be equity-based, a regulatory filing stated. Those shares would be escrowed for the time they are directors of the company, plus 12 months.
Mulacek, who retired from the company in 2013 amid speculation he was pushed, has further called that around one-third of directors should have technical expertise in the oil business, and the company should adopt “enhanced procedures for reporting reserves and discoveries”.
Claiming to own 5.1% of InterOil, Mulacek also wants to nominate one or more candidates to the board, suggesting he once again wants to exert control over the takeover target.
InterOil is now led by former Woodside Petroleum LNG executive Michael Hession.
Among Mulacek’s other demands, seemingly anticipating an offer from a likely suitor, such as Woodside, ExxonMobil or Total, is a rule prohibiting executive officers from receiving payment in connection with a change-in-control transaction unless the bid is above $C60 per share, around double where the company is trading now.
His proposed rule would also require that the company is trading well above the share price when the executive started their employment.
Also on the table is a demand that the company revise its reserves reporting and discovery declaration rules, a move that comes ahead of what could be a significant payday from Total.
A poison pill would also require shareholders get a vote on significant acquisitions and dispositions, defined as any asset with a market value greater than 10% of the book value of the company.
In response to the Mulacek Group’s bid, InterOil said it was reviewing the requisition and accompanying proposals and would respond in due course.
The junior said it had engaged in “extensive interactions” with is shareholders over the past year, during which time its shares have halved, along with much of the oil patch, and it said it would “take actions that it believes are in the best interest of InterOil and all of its shareholders”.
The New York-listed, Singapore-based company is widely tipped to be swallowed up before the Papua LNG project is sanctioned, with Woodside one of the major players in any battle, considering it was recently rebuffed by Oil Search in an $11.6 billion takeover approach.
It is widely believed that if Woodside were to make a bid that could trigger counter-offers from Total, which operates Papua LNG, or ExxonMobil, operator of PNG LNG.
Recent drilling on the flanks of the Antelope field have surprised on the upside and extended flow tests have confirmed connectivity, deliverability and excellent reservoir quality across Antelope, which should mean a less complex and lower cost development.
The results of the appraisal program will be submitted to two independent auditors for certification, a process which could take four to six months.
Total would then be required to pay out an estimated $US580 million ($A780 million) once the independent reserves report on Elk-Antelope is lodged.
Further, the market continues to speculate that Oil Search and InterOil have been in conversations about a potential merger.
InterOil’s major asset is an interest in the Elk-Antelope fields, the backbone of the proposed Papua LNG project, and the undeveloped fields.
Elk-Antelope has resources at Elk-Antelope of around 7.1 trillion cubic feet plus liquids (1C), enough to support a two train development, plus a further 6Tcf is its other discoveries such as Triceratops, Raptor and Bobcat.
InterOil’s market cap is around $1.46 billion, and the company expects to spend around $155 million this year, from current liquidity of $252 million in cash and undrawn sources.
InterOil will hold its annual general meeting on June 14. |
