Angus Energy (LSE:ANGS) suffered a 13.2pc hit today after revealing that it has been forced to hold a vote on whether to remove its managing director Paul Vonk.
The business sat at 9.9pc after revealing that it has received letters forcing the requisition of a general meeting. The orders have been signed by HSBC Global Custody Nominee Ltd and Jarvis Nominees. Together, the entities represent around 6.2pc of Angus’s total issued shares.
Shareholders will vote on whether to remove Vonk and any director appointed between the date of the requisitions and the date of the vote from Angus’s board. It proposes that they should be replaced by George Charles Bingham, the 8th Earl of Lucan, and Adam Salim Habib.
Angus believes that its non-board operations director and previous chairman Jonathan Tidswell-Pretorius has a direct interest in the Angus interest held by HSBC Global.
It said that the requisitions do not state whether Bingham and Habin would be appointed in an executive or non-executive capacity. It added that neither individual has been subject to the regulatory due diligence and appropriateness checks required before taking on a boardroom role. Furthermore, Angus said that, ‘subsequent to the receipt of the requisitions’, non-executive director Rob Shepherd has resigned with immediate effect.
As such, the business said it ‘regrets’ the proposals, calling them ‘unwelcome and unnecessary’. In particular, it said it is disappointing that they have arrived at such a crucial time for Angus, a UK conventional oil and gas production and development company.
In December, the business announced that it had begun a highly-anticipated commercial flow test programme at its Brockham Oil Field. The firm is expected to provide an analytical update on the Kimmeridge layers of the BR-X4Z well at Brockham ‘in due course’.
Today also saw Angus reveal the analysis of a seven-day well test at its Balcombe Field Discovery in the Weald Basin. The test was carried out in October and naturally flowed at 853bopd, not including 22.5pc water. A second flow period saw the well flow naturally at 1,587bopd, not including 6.6pc water.
In today’s update, Angus said it believes Balcombe-2Z can produce continuous oil with a low water cut. It now plans to demonstrate commercial oil production. To fund near-term planning as well as a field development plan submission at the site, it has entered a two-year £3m loan facility.
Angus has agreed the facility with YA II PN and Riverfort Global Opportunities. It can be drawn down in tranches over 24-months and include an implementation and commitment fee of 8.5pc. Advances have a term of 12 months and are repayable in cash. Angus intends to draw down £1.5m immediately under the facility. For more details about the terms of the facility, please click here.
Angus’s concerns over the timing of today’s announcement are justified. The management volatility in combination with the decision to take on an additional £3m raise question marks over the firm’s progress in coming months and, indeed, the outlook for shareholders.
Angus’s board said it unanimously agreed that the resolutions are not in the firm’s best interests. It has recommended that shareholders vote against the proposals at any requisitioned general meeting. Under UK Companies Act, the business has up to 21 days after the day the requisitions were received to call a general meeting. It then has up to 28 days to complete the meeting and vote on the resolutions.
A statement from the board reads: ‘Without reservation, the Board of Angus Energy views this General Meeting requisition as unwelcome and unnecessary. The Board strongly believes that the company has planned a very productive year for the company. Managing director Paul Vonk has our full support.’
Author: Daniel Flynn
Disclosure: The author does not own shares in the company mentioned in this article