Activist investment company Crystal Amber (LON: CRS) is requisitioning a general meeting at North Sea oil and gas producer Hurricane Energy (LON: HUR). It wants to remove three directors and replace three of its own nominees with two new directors.
There would be proposals at a general meeting to remove executive directors Anthony Maris and Richard Chaffe, along with chairman Philip Wolfe. Crystal Amber wants Tony Buckingham and Franco Castelli to be appointed to the board. On top of this, David Craik, John Wright and Juan Morera would also leave if the two new Crystal Amber nominees are voted onto the board. All three were nominated by Crystal Amber and the first two were appointed after a previous general meeting requisition.
This would mean that there would still be a majority of independent directors on the board. Tony Buckingham and Franco Castelli run Albion Energy, so they have sector expertise.
Formal sale process
A potential bid of 7.7p a share was rejected by Hurricane Energy, but this sparked a formal sale process that has led to other potential bid approaches. They have until 7 January to submit bids. Hurricane Energy has also said that it will return $70m to shareholders, which is equivalent to 3.1p a share, if there is no successful bid.
Net cash is expected to be $118m at the end of 2022 and Crystal Amber believes that the Lancaster field can continue production until the second quarter of 2025. Crystal Amber is supportive of the cash distribution. There are also $370m of tax losses.
The proposed directors believe that there is substantial potential in the Hurricane Energy interests and attracting new investment would enable them to be exploited.
Albion Energy would be granted an option equivalent to 5% of Hurricane Energy at 0.1p a share. A further 10% would be under option at 10p a share. In order to take up these options, Hurricane Energy would have to raise $250m for drilling by July 2023.
The Hurricane Energy share price rose 0.17p to 7.78p, which values the company at £152m. Crystal Amber is unchanged at 97.5p.
