Tap dissident ramps-up attacks
UPDATE 1.35pm: Dissident Tap Oil shareholder Chatchai Yenbamroong has ramped-up his attack on the company's board, accusing it in a letter to shareholders of presiding over a long-term erosion of value.
The Thai entrepreneur, who holds a 19.9 per cent stake in Tap, has requisitioned a shareholder meeting to remove chairman Doug Bailey, managing director Troy Hayden and non-executive director Michael Sandy, and replace them with Alan Stein, David Whitby, David Johnson and James Menzies.
It has sparked speculation Mr Yenbamroong's ultimate aim is to seize control of Tap before using his stake to orchestrate a takeover of the Perth company.
In support of his case, Mr Yenbamroong's letter noted the company's share price had fallen 75 per cent over the past five years.
"Given the substantial shareholder value destruction over many years, the purpose of this meeting is to seek to remove three of the four existing directors and appoint four new directors with substantial oil and gas expertise," the letter stated.
Mr Yenbamroong said Tap management had spent more than $250 million of shareholder funds on exploration since 2008 which had resulted in zero additional 2P reserves.
"In April 2014, Tap negotiated a debt facility with BNP Paribas for $US90 million - 96 per cent of the company's value at the time - based on the value of the reserves at Manora," he said.
"Despite placing Tap in such a highly leveraged position, the board and management decided not to hedge Manora's production at oil prices above $US100 per barrel (compared to today's price of $US49.1 per barrel)."
Mr Yenbamroong said the company had spent almost $70 million on staff and administration costs since 2008 and about $30 million on director and management remuneration while consistently posting losses.
He claimed the company had also been selling off assets one by one, rather than building assets for the future.
Mr Yenbamroong said he expected the extraordinary shareholder meeting to be scheduled for May.
Earlier this month, Tap managing director Troy Hayden described Mr Yenbamroong's move as a bid for control at the expense of other shareholders.
"This appears to be a highly opportunistic attempt to take control of the company without paying a control premium," he said.
Last week, Tap also announced Mr Yenbamroong was at risk of losing his stake in a lucrative Thai oil project.
It claimed that Mr Yenbamroong's Northern Gulf Petroleum had been issued a default notice by the operator of the Manora offshore project over an alleged failure to pay $US27.1 million in development and operating costs.
Northern Gulf owns 10 per cent of Manora while Tap holds 30 per cent, which it bought off Mr Yenbamroong.
Manora's operator and biggest shareholder is Mubadala Petroleum. Manora celebrated first oil in November, with Tap flagging positive net cash flow pre-debt repayments.
The $58 million-valued Tap said the default notice declared that if the outstanding money was not paid, Mr Yenbamroong's company would face standard, escalating penalties leading up to the withholding of its 10 per cent slice of oil sales revenue and the forced transfer of its Manora stake to "non-defaulting parties".
Tap shares were up 0.5 cents, or 2.08 per cent, to 24.5 cents at the close.
