DaveinHackensack

Cure for the Bad-CEO Blues: Sue Your Shareholders

This post should have been researched a little better. There's more to the Vaalco proxy fight than Weiss suggests. A thorough investigation of this would make for an interesting post. For management's side of this issue, here are some excerpts from Vaalco management's May 8th letter to its shareholders:

"As you may be aware, a New York based hedge fund, Nanes Delorme Partners I LP, has initiated a costly and disruptive proxy contest in an attempt to install its own paid nominees onto your Board of Directors. Nanes Delorme Partners only recently purchased its shares, and more than half of these were purchased by its newly revealed secret partner Pilatus Energy S.A. – an oil and gas company headquartered in Zug, Switzerland, whose purported leader1 was convicted and sentenced by a French court to five years in prison for fraud, embezzlement, bribery and kickbacks in “the biggest political and corporate sleaze scandal to hit a western democracy since the second world war.”2 We strongly believe that the objectives of Nanes Delorme Partners and Pilatus Energy are very different from your objectives.

[...]

Over the last 18 months, your Board and management team have laid the foundation necessary for significant increases in reserves and production. We have arranged for rigs and have concrete plans to drill seven exploration wells over the next twelve to eighteen months in areas that have similar geologic characteristics to those we have successfully explored and developed in the past.
• This current exploration program has the potential to add in excess of 50 million net barrels (after expected royalties) to our current 6.2 million barrels of proved reserves, an eight-fold potential increase. Even at a modest success rate, there exists the likelihood for dramatic increases in reserves and production over the near term.

[...]

Nanes Delorme Partners is well aware of the significant near-term upside inherent in VAALCO’s
current exploration portfolio. It is only now, when VAALCO’s stockholders are poised to realize this value, that Nanes Delorme Partners and Pilatus Energy have begun pushing for an opportunistic sale of the Company.

[...]

NANES DELORME PARTNERS AND PILATUS ENERGY ARE BUSINESS COMPETITORS TO VAALCO, CREATING SERIOUS CONFLICTS OF INTEREST"