Pryme board targeted againWednesday, 6 January 2016
Anthony Barich
PRYME Energy may be quiet on the operations front as it bunkers down to ride out low oil prices, but it has just received the second notice inside a couple of months to get rid of its board and appoint three new directors.
An individual or group of shareholders need at least a 5% stake in a company to launch a Section 249D notice to the ASX, but the identity of the shareholder/s won’t be revealed until the Notice if Meeting, which needs to be sent out within 21 days.
The meeting then needs to happen within 28 days from the 21st day.
The move comes barely a month after EVO Fund revoked a notice it lobbed in on November 4 requisitioning an extraordinary general meeting of the company to consider replacing each of Pryme’s current directors with three of its own nominees.
Former CEO Justin Pettett, who is now non-executive director having made redundant last month along with fellow co-founder and US-based chief operating officer Ryan Messer, said that while they would fight the move, ultimately the majority shareholders would decide their fate.
“I guess they find our cash and our position as a company attractive,” Pettett told Energy News this morning of the mystery player.
Pettett said he did not welcome the move, as he believes Pryme has cut enough costs to make it sustainable going forward as it sits on its exploration projects in Texas’ Permian Basin and the oil-rich region of the Mississippian Lime in Oklahoma.
“The oil market is obviously very depressed at the moment, but at the end of the day the majority shareholders will have the say. That’s the way it should work, and that’s what will happen,” he said.
He said that while Pryme’s board would prefer to figure out a way to move the company forward itself, “unfortunately it’s out of my hands”.
“We’ll get an opportunity to explain our case in the Notice of Meeting, as will the requisitioning shareholder,” Petttett said.
While the company is currently “on hold” as far as its exploration goes, it has cut all costs in the company, and all non-executive directors are on $30,000 a year, which Pettett said was “really the only cost in the company at the moment, as far as salaries”.
“That’s the only thing we can do when oil prices are trading where they are – cut costs, and I think we’ve done a good job of doing that,” he said.
The board currently consists of Pettett, Messer and Daniel Lanskey, who took over the chairman’s role on December 31, and will conduct a review of the company’s strategic options.
Pryme announced last month that Pettett and Messer will be a paid 12 months’ salary, but have waived a further 10 months’ worth of redundancy payments.
They will also stand to receive a 5% fee from the sale of the company’s Capitola oil project in Texas as an incentive to help find a buyer.
Pryme has said it was unlikely to find a partner to fund further drilling in the current market, so after two years a sale may be the best option.
Former chairman George Lloyd has left the company, while chief financial officer Sandra Gaffney was also made redundant.
cheers
BF
PYM Price at posting:
0.8¢ Sentiment: None Disclosure: Held
