GREENWICH, CONNECTICUT--(Marketwired - Oct. 31, 2013) - On October 21st, 2013 FrontFour Capital Group LLC ("FrontFour") and a like-minded shareholder (the "Requisitionists") announced that they had served the board of Renegade Petroleum Ltd. ("Renegade", or the "Company") with legal notice of their requisition of a special meeting of shareholders. FrontFour also demanded the disclosure of fees paid to the Company's advisors and any arrangements with current directors that include payments of finder's fees or success fees that are or were payable.
Ten (10) days have passed and the Company has made no effort to communicate with FrontFour or address shareholder concerns. The Company has provided no public communication with respect to selecting a special meeting date or disclosing advisor and insider fees. This refusal to engage with the true owners of the Company is deeply troubling. The current board has overseen the destruction of substantial shareholder value, has upheld poor standards of corporate governance, and has neither a strategy nor management team. Given Renegade's alarming lack of insider ownership and track record of corporate waste, FrontFour is concerned by the board's potential willingness to use shareholder funds to fight the shareholders of the Company.
During the last ten (10) days, FrontFour has continued to purchase shares of Renegade. In addition, according to Bloomberg, over the same time period approximately seven percent (7%) of the outstanding shares of Renegade have been traded. FrontFour has also received scores of unsolicited emails and calls from both institutional and retail investors who are demanding change. The Requisitionists intend to engage these shareholders directly following the filing of their circular and related proxy materials.
FrontFour believes that Renegade shares trade at a significant discount to net asset value and will continue to do so as long as the status quo is maintained. Recent transactions have confirmed this view. One day after the Requisitionists served the board of Renegade with their legal notice of their requisition of a special meeting of shareholders, a peer of Renegade completed two light oil acquisitions (the "Acquisitions") for a total purchase price between $303.6 million and $306.9 million. The production and growth profiles of the Acquisitions are similar to those of Renegade. To compare the Acquisitions to Renegade, FrontFour used street consensus estimates for net debt and debt adjusted cash flow. The price per share of Renegade implied by the Acquisitions is $1.43 to $3.88 depending on the respective metric utilized, representing a potential shareholder return of approximately 30% to 252%. It is worth noting that the reserve life index for the Company is 11.8 years compared to the Acquisitions of 9.2 years, with net drilling locations of 323 (Renegade's October 2013 presentation) versus the Acquisitions of 184.
About FrontFour Capital Group LLC:
Founded in 2006, FrontFour is an investment management company with offices in Greenwich, Connecticut and Toronto, Ontario.
The TSX Venture Exchange has not reviewed nor approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release. This news release is not a solicitation of a proxy.