Kimmeridge Energy Management said on Tuesday it has withdrawn its proposal to combine its gas-producing assets in South Texas with SilverBow Resources.
Kimmeridge, SilverBow’s largest shareholder, in its latest attempt to acquire the company over the last two years had sent its offer on March 13 to combine assets.
Along with Riposte Capital, SilverBow’s second-largest shareholder, Kimmeridge has been pushing the U.S. energy firm to revamp its board or to explore a sale.
“Given SilverBow’s lack of engagement, Kimmeridge sees no pathway towards a transaction… As a result, we are withdrawing the proposal and will be focused on providing solutions for SilverBow’s broken governance,” Kimmeridge said in a statement.
SilverBow did not immediately respond to a request for comment.
The combination with SilverBow, which operates on around 180,000 net acres in South Texas’ shale basin, would have created a pure-play Eagle Ford shale operator with an estimated enterprise value of about $3.6 billion.
Riposte, in an emailed response to Reuters, said it continues to believe that a combination with Kimmeridge Texas Gas was in the best interest of all shareholders.
In March, SilverBow rejected three nominees proposed by Kimmeridge, flagging that they had close ties or history with Kimmeridge, which raised questions over their “independence and ability to represent the interests of all SilverBow shareholders”.
SilverBow named Leland Jourdan, who worked at Chevron for nearly two decades, as a member of its board, while revealing that Kimmeridge had proposed to remove him in an upcoming shareholder vote in May.
(Reporting by Mrinalika Roy and Seher Dareen in Bengaluru; Editing by Krishna Chandra Eluri)