CALGARY, Jan. 17, 2018 /CNW/ – OBSIDIAN ENERGY LTD. (TSX/NYSE – OBE) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) confirms it is aware of a statement by FrontFour Capital Group LLC (“FrontFour”) regarding their views on the direction of the Company.
Obsidian Energy’s corporate strategy is well defined and has the unanimous support of the Board of Directors (the“Board”). We have been organically growing the Company through the combination of sustaining a low decline production base and leveraging significant development optionality. The Company delivered strong results throughout the past year, and provided an operational update earlier this week that confirms the business plan is working. Those operational successes, along with our highly capital efficient 2018 plans, are a product of robust capital planning and a project review process with both Management and the Board. A change of course would hinder Obsidian Energy’s progress and ability to deliver on the value maximizing efforts already underway.
As part of our active and ongoing communications with all stakeholders, Obsidian Energy’s Board and Management appreciate constructive shareholder input and take all views seriously. We received a letter from FrontFour in early October, which contained ideas we had already been pursuing for several months. In addition, we received a second letter from FrontFour in mid-December threatening “more aggressive public action”, unless we agreed to the addition of a mutually agreed upon Director to the Board.
In the interest of avoiding a costly and distracting proxy fight and as part of the Board’s ongoing renewal process, our Board expressed a willingness to work with FrontFour regarding their views on Board composition. FrontFour had previously introduced the idea of Mr. Gordon Ritchie as a Board member, a suggestion our Board unanimously embraced due to the experience and credibility of Mr. Ritchie. Mr. Ritchie was appointed to the Board in December.
Concurrently, the Board interviewed candidates proposed by FrontFour and mutually agreed to the addition of one of those individuals. The appointment was accompanied with the same standstill agreement executed by our latest Board addition, Mr. Edward (Ed) H. Kernaghan. Despite extensive negotiations, FrontFour was unwilling to execute the agreement. As a result, we were unable to add the mutually agreed upon candidate to the Board.
One of the primary roles of our Board is to represent the interests of all shareholders. As indicated by our recent appointment of Mr. Kernaghan, our largest shareholder, we are supportive of ownership representation on the Board. Obsidian Energy’s Board is now comprised of nine highly qualified and experienced directors, eight of whom are independent, including the Acting Chair. As part of our ongoing Board and governance process, the Governance Committee will nominate directors in advance of the Annual General Meeting that it believes will serve in the best interests of all shareholders.
We look forward to continuing to deliver strong results on behalf of shareholders.
Obsidian Energy shares are listed on both the Toronto Stock Exchange and New York Stock Exchange under the symbol “OBE”.