Results Reflect Board’s Failure to Cut Costs
and Undertake Disciplined Capital Spending
Group 42 and Bradley Radoff Intend to Solicit
Consents to Bring Urgently Needed Change to VAALCO by Replacing
Majority of the Board
Group 42, Inc. and Bradley Radoff (and related entities),
together the beneficial owners of approximately 11.1% of the
outstanding shares of VAALCO Energy, Inc. ("VAALCO" or the
"Company") (NYSE:EGY), today issued the following statement
regarding VAALCO’s third quarter earnings announcement:
“VAALCO’s third quarter results reveal the current Board’s
continuing inability to cut costs and implement more disciplined
capital spending. Despite an extremely challenging environment for
commodity prices and industry wide cost cutting, VAALCO’s cash
G&A expenses remain unacceptably high. The Company’s cash
G&A for the three months ended September 30, 2015 grew 47.6%
from the second quarter of 2015, increasing to $3.1 million from
$2.1 million. Cash G&A for the nine months ended September 30,
2015 grew 6.3% versus the same period a year ago, increasing to
$8.5 million from $8.0 million.
“The Company’s Capex for the three months ended September 30,
2015 was $31 million, an astounding amount relative to the
Company’s revenues for the same quarter of only $17.5 million, as
well as relative to its market capitalization. VAALCO has also once
again increased its Capex guidance for 2015 from $83 to $86
million, an increase from guidance issued just three months ago of
$70 to $80 million.
“It is clear to us that VAALCO’s Board of Directors has failed
to implement the changes needed to succeed in this difficult
environment, underscored by the approximately $285 million in
market value the Company has lost over the last 12 months. Further,
once again the Board has proven unable to properly manage financial
reporting due to poor oversight and financial controls as the
Company was required last week to postpone its previously announced
date for the third quarter earnings release.
“It is time for a leadership change at VAALCO that can
sustainably rein in the Company’s culture of overspending and poor
corporate governance. That is why we have announced our intention
to solicit consents from our fellow stockholders to replace four of
the Company’s current members of the Board. In contrast to current
directors and executives who are compensated with stock grants,
director fees and compensation packages, our interests are fully
aligned with those of all stockholders. We strongly believe that
VAALCO sorely and urgently needs a Board reconstituted to include
directors with the right qualifications, experience and incentives
to effect meaningful improvements at VAALCO.”
Please note that the biography for Pete Dickerson that was
included in Group 42 and Bradley Radoff’s press release dated
November 6, 2015 has been revised below to match the version
included in the Preliminary Consent Statement filed by Group 42 and
Bradley Radoff with the Securities and Exchange Commission:
Pete J. Dickerson, age 60, has served as an independent
consultant, offering commercial and transactional advice in his
capacity as a senior upstream oil and gas professional, since June
2015. Since April 2015 he has served as West Africa Consultant for
Well Flow International, a company that provides technology-enabled
wellbore cleanup tools, associated chemicals and well intervention
and stimulation chemicals, and which is a subsidiary of Group 42,
Inc. Prior to consulting for Well Flow, Mr. Dickerson served as
Head of Commercial, Planning and Economics for Tullow Oil Plc.
(“Tullow”), a leading independent oil exploration and production
company, from February 2002 to June 2014. Mr. Dickerson was
intimately involved in all of Tullow’s business development
activities and played a key role in the organization’s dramatic
growth. Mr. Dickerson also served on Tullow’s original Executive
Committee, Senior Leadership and Crisis Management teams. Prior to
joining Tullow, Mr. Dickerson joined Lovegrove and Associates, an
upstream A&D advisory firm, in 1993, as manager and eventually
director. During his time with Lovegrove and Associates, Mr.
Dickerson was involved in over 100 projects for more than 40
clients in the upstream energy industry. The Canadian Imperial Bank
of Commerce (“CIBC”) acquired Lovegrove and Associates in 1996. Mr.
Dickerson continued to serve as Managing Director for CIBC in the
oil & gas team and originated Tullow’s transformational
acquisition of UK assets from BP. In 1985 Mr. Dickerson joined Sun
International Exploration & Production Company (“Sun E&P”)
as the Planning Manager for U.K. and Europe. Shortly thereafter,
Dickerson assumed the role of Planning Manager for its entire
International E&P Division. Before Sun E&P withdrew from
international ventures, Mr. Dickerson took on the additional
responsibility of managing the accounting function of the division.
Mr. Dickerson began his career in 1978 as a Joint Venture
Accountant for Gulf Oil Corporation (“Gulf Oil”) and held various
positions at Gulf Oil through 1985, including Senior Financial
Analyst. Mr. Dickerson holds a Bachelor of Science with Honours in
Chemistry and Business Administration from Kingston University. The
Group 42-BLR Group believes Mr. Dickerson’s upstream and
exploration and production and direct West Africa focused
expertise, as well as his extensive corporate strategy and
governance experience, make him an ideal candidate for the
Board.
About Group 42, Inc.:
Group 42 is a U.S.-based holding company that delivers
innovative energy services to international and enterprise class
customers around the globe. Through its subsidiaries and
international joint ventures, it partners with other multinational
energy companies that have expertise in applying
technology-oriented solutions. Group 42 operates in North
America, Asia Pacific, the Arabian Gulf, West
Africa and the North Sea.
About Bradley L. Radoff:
Bradley L. Radoff is a private investor based
in Houston, Texas.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Group 42, Inc. (“Group 42”), together with the other
participants named herein (collectively, the “Group 42-BLR Group”),
has made a preliminary filing with the Securities and Exchange
Commission (“SEC”) of a consent statement and an accompanying
consent card to be used to solicit consents from stockholders of
VAALCO Energy, Inc., a Delaware corporation (“VAALCO” or the
“Company”), for a number of proposals, the ultimate effect of which
would be to remove four current members of the Board of Directors
of VAALCO, and replace them with the Stockholder Group’s four
highly qualified director nominees.
THE GROUP 42-BLR GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF THE
COMPANY TO READ THE CONSENT STATEMENT AND OTHER CONSENT MATERIALS
AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH CONSENT MATERIALS WILL BE AVAILABLE AT NO CHARGE
ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS CONSENT SOLICITATION WILL PROVIDE COPIES OF
THE CONSENT STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE
PARTICIPANTS' CONSENT SOLICITOR.
Group 42, Inc., Paul A. Bell, BLR Partners LP (“BLR Partners”),
BLRPart, LP (“BLRPart GP”), BLRGP Inc. (“BLRGP”), Fondren
Management, LP (“Fondren Management”), FMLP Inc. (“FMLP”), The
Radoff Family Foundation (“Radoff Foundation”), Bradley L. Radoff,
Pete J. Dickerson, Michael Keane, and Joshua E. Schechter are
participants in this solicitation.
As of the date hereof, Group 42 owned directly 2,499,692 shares
of Common Stock. Paul A. Bell, who serves on the board and as the
President and Chief Executive Officer of Group 42, may be deemed to
beneficially own the 2,499,692 shares owned by Group 42. As of the
date hereof, BLR Partners owned directly 1,951,095 shares of Common
Stock. BLRPart GP, as the general partner of BLR Partners, may be
deemed to beneficially own the 1,951,095 shares owned by BLR
Partners. BLRGP, as the general partner of BLRPart GP, may be
deemed to beneficially own the 1,951,095 shares owned by BLR
Partners. Fondren Management, as the investment manager of BLR
Partners, may be deemed to beneficially own the 1,951,095 shares
owned by BLR Partners. FMLP, as the general partner of Fondren
Management, may be deemed to beneficially own the 1,951,095 shares
owned by BLR Partners. As of the date hereof, the Radoff Foundation
owned directly 85,000 shares of Common Stock. As of the date
hereof, Bradley L. Radoff owned directly 1,938,905 shares of Common
Stock and, as the sole stockholder and sole director of each of
BLRGP and FMLP and a director of Radoff Foundation, may be deemed
to beneficially own the 1,951,095 shares owned by BLR Partners and
the 85,000 shares owned by the Radoff Foundation. As of the date
hereof, none of Messrs. Dickerson, Keane or Schechter beneficially
owned any shares of Common Stock.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151111006291/en/
for Group 42, Inc. and Bradley RadoffInvestors:Jonathan
Salzberger / Scott Winter212-750-5833orMedia:Sloane &
CompanyElliot Sloane, 212-446-1860or Dan Zacchei, 212-446-1882
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