IOC Update re Call for Special Meeting

[algon223]

InterOil Issues Statement Regarding Proceedings Commenced by Shareholder

PR Newswire

SINGAPORE and PORT MORESBY, Papua New Guinea, April 13, 2016

SINGAPORE and PORT MORESBY, Papua New Guinea, April 13, 2016 /PRNewswire/ -- InterOil Corporation (NYSE: IOC) (POMSoX: IOC) today issued the following statement regarding the commencement of legal proceedings against the Company by a shareholder, Mr Phil Mulacek, seeking to call a Special Meeting of Shareholders on June 10, 2016, immediately before InterOil's Annual and Special General Meeting  scheduled for June 14, 2016.

The InterOil Board of Directors and management team are fully committed to acting in the best interests of the Company and delivering enhanced value for all InterOil shareholders.  In addition, InterOil values constructive communications with its shareholders and, accordingly, engaged with Mr Mulacek.

On April 8, 2016, members of InterOil's Board of Directors -- including the independent Chairman, Chris Finlayson -- met with Mr Mulacek. Following this meeting, InterOil invited Mr Mulacek and his representatives to discuss Mr Mulacek's proposals in order to reach agreement on resolutions that would then be voted on at the AGM scheduled for June 14, 2016.

InterOil views the commencement of legal proceedings in order to call for a Special Meeting of Shareholders separately from the AGM as an unnecessary use of corporate resources and shareholder time, especially as the special resolutions were already being considered as matters to be voted on at the AGM.

We are disappointed that Mr Mulacek has chosen to initiate legal proceedings against the company on this basis. As such, the Board will continue to attempt to engage Mr Mulacek in an effort to agree on special resolutions to be voted on at the AGM.

[Putncalls]

Management isn't giving out a lot of details I suppose.

[Stavros]

I view payment to non-productive members of the Board of Directors, including the independent chairman, Mr. Finlayson, as a much MUCH larger unnecessary use of corporate resources.

[sageo]

I view payment to non-productive members of the Board of Directors, including the independent chairman, Mr. Finlayson, as a much MUCH larger unnecessary use of corporate resources.

Stavros - Hope you have a good day. For me,some days things just( like some of our young folks say) "suck". Some years ago I saw a movie "Fun with Dick and Jane" starring Jim Carey and Tia Leone. Today's post about IOC's response to Phil's action made me think about the word "fun". It just doesn't seem like fun to me,to watch our company attorneys, board of directors and officers get rid of our borrowed cash at such a rapid rate.....yes,I understand they are trained professionals, but in my fuzzy brain it just seems like too little is being gained for such heavy cash being spent. Thanks for letting me vent a little frustration.....now I will try to get back to being more optimistic.

[2126]

It seems that some members of this board don't really appreciate the value of an experienced and diverse board of directors for a small O&G exploration company operating in a developing country in SE Asia that has entered into a multi-billion dollar agreement with one of the largest major oil companies in the world. IOC has positioned itself to move into a very different phase of its existence in the near future: that of participating in the design, financing and construction of a multi-billion dollar LNG plant, including all of the attendant social, environmental, legal, engineering, design, financing, and construction aspects that such an endeavor entails. As of December 2013, IOC is no longer a small independent company pursuing gas exploration on a small island nation. When it entered into the deal with Total, it became a major partner in a very expensive and wide-ranging international development project.

Since that time, the IOC board of directors has moved to solidify and expand the expertise that it has available to bring to bear on the increasingly complex decisions that it must make. The BOD now has 9 members and their experience and expertise spans a range of qualifications and expertise that were not necessary in the 'old' IOC, but are highly valuable to IOC now and in the immediate future. IOCs current BOD has much greater depth in O&G financing and large-scale capital projects as well as greater experience in the PNG/Asian banking and development arena. To review a bit: the IOC board now has:

• Chris Finlayson: a geologist, physicist and petroleum engineer with over 37 years experience, including 33 with Royal Dutch Shell, with extensive experience in large-scale capital projects in Russia, Africa, Asia, and Europe.
• Ford Nicholson: a financial executive with extensive experience with the financing and development of energy projects worldwide.
• Chee Keong Yap: a financial executive with extensive experience in the Signapore/Asian/Australian financial arena
• Sir Kermit Wilson: recently retired Chairman of the Board of the Bank of Papua New Guinea and current member of the BOD of the Asian Development Bank
• Roger Lewis: finance executive with over 20 experience with Woodside, most recently as its Financial Controller
• Sir Rabbie Namaliu: former Prime Minister of Papua New Guinea, former Speaker of the PNG Parliament and former PNG Minister of Foreign Affairs and Trade
• Dr. Ellis Armstrong: petroleum financial executive with over 30 years experience with BP, finishing as the Chief Financial Officer of its global exploration and production group
• Katherine Hirschfeld: an engineer with over 20 years experience with BP on projects throughout the world, finishing her career as Executive Director of BP Australasia
• Isikeli Taureka: Executive Director of Papua New Guinea and former executive with Chevron Asia (including as former President of Chevron Texaco China Energy) and with extensive petroleum financing experience

This is not pumping--these are simply the facts surrounding the current IOC BOD. In the very near future, IOC will be entering a a very difficult phase of its existence: handling a massive influx of funds from its Interim Resource Payment from Total, preparing for the upcoming FEED and FID for a world-class LNG plant development project and, equally important, fending off likely takeover attempts while negotiating potential sell-downs of some of its non-E/A resources, while planning further exploration of its PNG acreage. Personally, I would not want IOC to enter into this next phase with a BOD with less range of experience and knowledge than the current board.

[Putncalls]

Pavel from RJ on Suit:

InterOil Corp. (IOC/$32.27/Outperform): former CEO's lawsuit is a non-event that merely adds noise. Last month, Phil Mulacek,

the former CEO, made a formal proposal to reduce the size of the board and also cut the amounts paid to board members. In our

view, neither idea makes much difference in the grand scheme of things, and the proposal was interesting purely because it

seemingly came out of nowhere, with Mulacek (a 7% shareholder) having been disengaged since being ousted three years ago. This

week, the plot thickened. After meeting a few days ago with management, Mulacek decided to file a lawsuit against the company,

demanding a special shareholders meeting in advance of the normal annual meeting on June 14. Mulacek's agenda at this point is a

mystery to us. If the lawsuit is a kind of belated revenge tactic against his former employer, it certainly faces low odds of success.

And if he wants his old job back, then litigation is an even more counterproductive way of going about it. This drama seems rather

pointless, but in any case we believe it represents a non-event insofar as business fundamentals (resource certification, etc.) are

concerned.

[steve3752]

It seems that some members of this board don't really appreciate the value of an experienced and diverse board of directors for a small O&G exploration company operating in a developing country in SE Asia that has entered into a multi-billion dollar agreement with one of the largest major oil companies in the world. IOC has positioned itself to move into a very different phase of its existence in the near future: that of participating in the design, financing and construction of a multi-billion dollar LNG plant, including all of the attendant social, environmental, legal, engineering, design, financing, and construction aspects that such an endeavor entails. As of December 2013, IOC is no longer a small independent company pursuing gas exploration on a small island nation. When it entered into the deal with Total, it became a major partner in a very expensive and wide-ranging international development project.

Since that time, the IOC board of directors has moved to solidify and expand the expertise that it has available to bring to bear on the increasingly complex decisions that it must make. The BOD now has 9 members and their experience and expertise spans a range of qualifications and expertise that were not necessary in the 'old' IOC, but are highly valuable to IOC now and in the immediate future. IOCs current BOD has much greater depth in O&G financing and large-scale capital projects as well as greater experience in the PNG/Asian banking and development arena. To review a bit: the IOC board now has:

• Chris Finlayson: a geologist, physicist and petroleum engineer with over 37 years experience, including 33 with Royal Dutch Shell, with extensive experience in large-scale capital projects in Russia, Africa, Asia, and Europe.
• Ford Nicholson: a financial executive with extensive experience with the financing and development of energy projects worldwide.
• Chee Keong Yap: a financial executive with extensive experience in the Signapore/Asian/Australian financial arena
• Sir Kermit Wilson: recently retired Chairman of the Board of the Bank of Papua New Guinea and current member of the BOD of the Asian Development Bank
• Roger Lewis: finance executive with over 20 experience with Woodside, most recently as its Financial Controller
• Sir Rabbie Namaliu: former Prime Minister of Papua New Guinea, former Speaker of the PNG Parliament and former PNG Minister of Foreign Affairs and Trade
• Dr. Ellis Armstrong: petroleum financial executive with over 30 years experience with BP, finishing as the Chief Financial Officer of its global exploration and production group
• Katherine Hirschfeld: an engineer with over 20 years experience with BP on projects throughout the world, finishing her career as Executive Director of BP Australasia
• Isikeli Taureka: Executive Director of Papua New Guinea and former executive with Chevron Asia (including as former President of Chevron Texaco China Energy) and with extensive petroleum financing experience

This is not pumping--these are simply the facts surrounding the current IOC BOD. In the very near future, IOC will be entering a a very difficult phase of its existence: handling a massive influx of funds from its Interim Resource Payment from Total, preparing for the upcoming FEED and FID for a world-class LNG plant development project and, equally important, fending off likely takeover attempts while negotiating potential sell-downs of some of its non-E/A resources, while planning further exploration of its PNG acreage. Personally, I would not want IOC to enter into this next phase with a BOD with less range of experience and knowledge than the current board.

Per last  years annual report the total compensation of Dr. Hession in 2014 was $6,971,796.00

If terminated, he is entitiled to $37,015,000.00

He has never bought a single share on the open market and  the company needs to extend its credit line to keep going.

Does that sound like a board that is doing the job for the best interest of shareholders?

[2126]

• MH is not on the BOD;(Sorry this is incorrect. He joined the BOD in November 2013)
  
• His compensation is based on his contract from 7/2013;
• Oil prices were over $100/bbl in July 2013;
• No one complained about MH's compensation when he was hired;
• MH's annual compensation is in line with other CEOs in the O/G industry (Woodside CEO Coleman made $8.45 million in 2014)
• MH's purchase of IOC stock is regulated by the IOC Insider trading policy and is not subject to his personal desires to buy shares or not;
• The IOC insider trading policy was enacted by the IOC BOD on which MH has no vote whatsoever.
(MH does have a vote as a director, but the policy is still controlled by the entire BOD and not by the CEO).

[steve3752]

• MH is not on the BOD;
• His compensation is based on his contract from 7/2013;
• Oil prices were over $100/bbl in July 2013;
• No one complained about MH's compensation when he was hired;
• MH's annual compensation is in line with other CEOs in the O/G industry (Woodside CEO Coleman made $8.45 million in 2014)
• MH's purchase of IOC stock is regulated by the IOC Insider trading policy and is not subject to his personal desires to buy shares or not;
• The IOC insider trading policy was enacted by the IOC BOD on which MH has no vote whatsoever.

When he was hired he made less than 2 million.

[katytrader]

• MH is not on the BOD;
• His compensation is based on his contract from 7/2013;
• Oil prices were over $100/bbl in July 2013;
• No one complained about MH's compensation when he was hired;
• MH's annual compensation is in line with other CEOs in the O/G industry (Woodside CEO Coleman made $8.45 million in 2014)
• MH's purchase of IOC stock is regulated by the IOC Insider trading policy and is not subject to his personal desires to buy shares or not;
• The IOC insider trading policy was enacted by the IOC BOD on which MH has no vote whatsoever.

2126, your posts should be helpful for those who don't take time to read website or IOC documents.  You should note though that Hession has been a director since November 15, 2013.  It might also be noted that Mulacek had a BoD of eight members, including himself (and his brother-in-law.....lol.)