Tap flags possible asset sales
Tap Oil has responded to an attempted board coup by flagging the sale of assets and even canvassing the prospect of flushing out a takeover offer.
The strategic review of the company's assets was prompted by Thai entrepreneur and 19.98 per cent shareholder Chatchai Yenbamroong announcing plans earlier this week to remove three of the company's four directors including chairman Doug Bailey, managing director Troy Hayden and non-executive director Michael Sandy.
Mr Yenbamroong wants to install his own nominees including Alan Stein, David Whitby, David Johnson and James Menzies.
Tap has already labelled Mr Yenbamroong's move as an opportunistic bid to take control of the company without paying a takeover premium.
However the company said today it wanted to offer shareholders alternative options to Mr Yenbamroong's proposal to maximise value for all shareholders.
"The strategic review will consider a number of divestment options for each asset, including the company's flagship Manora Oil Development as well as the company's non-core Australian portfolio," Tap said in a statement.
"In this regard, Tap notes that such transactions (if successfully completed) should enable the company to reduce its debt and potentially also allow for the payment of fully franked dividends to shareholders."
The company said it would also consider "any potential whole of company proposals that may emerge, should they provide compelling value for Tap shareholders".
It noted Fosun's recent acquisition of Roc Oil and Bangchak's takeover of Nido Petroleum.
The company said it had appointed Miro Advisers and Corrs Chambers Westgarth to help with its review.
In a separate letter to shareholders, Tap noted Mr Yenbamroong had not yet provided any reasons for seeking to reconstitute the board, nor had he requested board representation before undertaking his course of action.
"The Tap board notes that Mr Yenbamroong's action coincides with the significant drop in the oil price and with Tap's recent announcement of potential cost overruns by the operator of the Manora oil development," the company said.
"The Tap board is of the view that the company's current share price does not reflect Tap's inherent value, particularly as the Manora oil field has now reached peak production of 15,000 bopd (gross)."
It urged shareholders to reject Mr Yenbamroong's proposed board spill.
Tap shares were down one cent to 29 cents at 8.15am, not far from its all-time low of 26 cents struck earlier this week.
