Obsidian Energy, a leading producer of natural gas and oil based in Calgary, Alberta, Canada has recently been given suggestions for new Board of Director’s nominees by FrontFour Capital Group, LLC. The capital group and its affiliate groups are shareholders who own a significant portion of Obsidian Energy’s shares. There investments in the company total over $28 million which is roughly 5.7% of the company’s capital.
FrontFour Capital, is in opposition to Obsidian’s strategic operating and capital plan. FrontFour states that their plan should focus on redirecting capital in key operating areas and should pay down debt as much as possible. In order to implement their strategies, Front Four are determined to get more representation of their company and interests on the Board of Directors to have more of a say in their corporate decisions. They also state that they are against a 3:1 reverse stock split proposed by Obsidian to bring them back into compliance with the listing requirements set forth by the New York Stock Exchange: a stock must have a value of one dollar or more. The current value of Obsidian stock is approximately $0.96. FrontFour states that companies that execute stock splits do this from a position of weakness and the performance of stocks after stock splits are very poor. They believe that Obsidian should first strengthen their operating and capital plan, and this will stimulate the stock price to gain value. View Additional Info Here.
FrontFour believes that their nominees have the best experience in operations and technology in the energy sector and Obsidian Energy will be valued higher by the equity markets in a shorter period of time. They think that the Board of Directors need a new perspective and also are in need of energy experts that are experienced in dealing with complex situations to help inform and drive their decisions.
View Source: https://en.wikipedia.org/wiki/Obsidian_Energy