BOSTON, July 24, 2018 /CNW/ — Highfields Capital Management (“Highfields”), a value-oriented investment firm that manages private funds which own more than 9.9% of MEG Energy Corp. (TSX: MEG) (“MEG Energy” or the “Company”) shares, today announced that Daniel S. Farb has resigned from the Board of Directors of MEG Energy, effective immediately. Mr. Farb, a Managing Director of Highfields, was appointed to MEG Energy’s Board on December 1, 2017.
“I served on the MEG Energy Board for only eight months, yet I am pleased with many of the positive changes that were implemented during my tenure, including the sale of the Access Pipeline, the retirement of over C$1 billion of debt, and changes at senior levels of management,” Mr. Farb said. “However, despite this progress, there is still more to do. Unfortunately, it is my conclusion that the Board is intent on reverting back to a legacy of failing to put the best interests of the Company and shareholders first.”
“I have regrettably concluded that I am unable to perform my role effectively and have resigned from the Board,” added Mr. Farb.
Highfields noted that MEG Energy is distinguished by outstanding assets, technology and employees. However, the Company trails its peers in many critical respects. The Company’s capital allocation and hedging record have been abysmal, and its reported SG&A costs per barrel are nearly twice the average of its peers. As a result of these factors and a series of other self-inflicted wounds, MEG Energy has been one of the worst performers in the TSX Energy Index since its IPO in 2010, and its performance during the most recent three- and five-year periods has been similarly poor.
Highfields believes immediate and decisive action is required by the Board to reorient MEG Energy to put the Company’s interests first and to recognize the Company’s enormous financial and strategic value on behalf of all shareholders. As MEG Energy’s second largest shareholder, Highfields will continually evaluate all options available to it.
About Highfields Capital
Highfields Capital Management is a value-oriented investment management firm which manages private investment funds for endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors. The Highfields funds invest worldwide in public and private companies across a wide variety of industries and security types. The firm was founded in 1998 by Jonathon Jacobson and is based in Boston, MA.