HOUSTON, Dec. 17, 2020 /PRNewswire/ -- American Resources,
Inc., and SK Energy LLC, the investment vehicle of Dr. Simon Kukes, one of the largest shareholders of
Ring Energy, Inc. (NYSE: REI), announced today that they believe
the strong lack of support shown by the shareholders of Ring Energy
at its December 15, 2020 Annual
Meeting shows the Board needs to make changes as they no longer
represent the best interests of all shareholders, and they continue
to be concerned with the Board's poor performance, conflicts of
interest and potential violations of fiduciary duties and
disclosure obligations.
While Ring Energy's December 15,
2020 press release claims its shareholders voted
"decisively" to approve the new Chairman and other Directors to the
Board, less than half of the 68.6 million shares present and
available to vote at the meeting actually voted in favor of the new
Chairman and other Directors, with 55% of shares present
(~37.8 million shares) withholding votes either directly or through
broker non-votes. Hardly a "decisive" victory as
portrayed by Ring Energy, with the reality being that most of
the shares present at the meeting did not support and approve the
new Chairman and other Directors, which was decidedly not
the case in the past five years as illustrated in the chart
below.
Director
Votes
|
Votes
For
|
Votes
Withheld
|
Broker
Non-Votes
|
Total
|
2020
|
45%
|
14%
|
41%
|
100%
|
2019
|
55%
|
11%
|
33%
|
100%
|
2018
|
65%
|
17%
|
18%
|
100%
|
2017
|
82%
|
2%
|
16%
|
100%
|
2016
|
83%
|
16%
|
N/A
|
100%
|
This clearly demonstrates a dramatic shift in shareholder
support against the incumbent Board over the past few years.
SK Energy and American Resources believe the reason for this
lack of support is due to Ring Energy's significant
underperformance relative to its peers in the oil and gas sector
--- indeed, Ring Energy's share price is down ~72% year to date
through December 15th vs.
a drop of ~34% in the XOP (SPDR S&P Oil & Gas Exploration
& Production ETF) over the same period -- as well as the deep
conflicts of interest on the Board and between the Board and its
new CEO, the significant dilution created by Ring Energy's recent
equity offering, and Ring Energy's potential fiduciary duty and
disclosure issues related to the equity offering that was promptly
followed by the termination of its Delaware asset sale, all of which have been
previously discussed in recent announcements by SK Energy and
American Resources.
In August 2020, SK Energy and
American Resources proposed more than a dozen highly-qualified,
independent individuals as candidates for the Board of Ring Energy
– none of whom were submitted to shareholders for approval at the
recent Annual Meeting – and SK Energy and American Resources again
urge the Ring Energy Board to consider these candidates for
immediate appointment to the Board.
SK Energy and American Resources continue to call upon each
individual shareholder and institutional shareholder of Ring Energy
to examine the actions of the Board of Directors with regard to the
appointment and compensation of its new CEO and the sale of Ring
Energy shares in October 2020, and to
also examine all of the other potential distractions that the Board
may face and examine potential fiduciary duty issues and conflicts
of interest that the Board may have.
Given the significant lack of support of the Board as evidenced
by their dismal Annual Meeting voting results, SK Energy and
American Resources believe it is imperative that the incumbent
Board heed the voice of its shareholders and promptly add
shareholder representatives to the Board in an effort to improve
the overall quality of corporate governance and help drive
shareholder returns.
About SK Energy LLC and Dr. Simon
Kukes
SK Energy LLC is an investment company owned by
Dr. Simon Kukes, a globally-renowned oil and gas industry
executive. Dr. Kukes has held various positions over the years,
including as President and CEO of Tyumen Oil Company (TNK) where he
was involved in the ~$20 billion
merger of TNK and British Petroleum to form TNK-BP in 2003, and as
CEO of Hess Corporation's (NYSE: HES) Samara-Nafta subsidiary,
where he was instrumental in the subsidiary's $2.05 billion sale to Lukoil in 2013. He is also
currently the largest shareholder, CEO and director of PEDEVCO
Corp. (NYSE MKT: PED), an NYSE-listed oil and gas company active in
the Permian and D-J Basins.
About American Resources, Inc.
American Resources,
Inc. ("ARI") is a Houston, Texas
based oil and gas investment, development and operating company
focused on acquisition of underexploited, distressed and/or
undervalued oil and gas assets and companies where ARI believes its
involvement can add value. ARI strives to maximize value through
active management of assets and/or board level participation in its
corporate investments.
About Ring Energy, Inc.
Founded in 2012, Ring Energy
is a Midland, Texas-based oil
and gas exploration, development and production company with
current operations in the Permian Basin of West Texas and
is recognized as the top producing oil basin in North
America.
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SOURCE SK Energy LLC and American Resources, Inc.