By Sergio Chapa, San Antonio Business Journal
A consent solicitation standoff between VAALCO Energy Inc. and San Antonio-based holding company Group 42 heated up following the release of poor third quarter results.
VAALCO (NYSE: EGY) released its third quarter results on Tuesday where the Houston-based company reported $17.5 million in revenue but a net loss of $33.7 million.
U.S. Securities and Exchange Commission records show that VAALCO lost an additional $5.2 million in the second quarter and lost another $39 million in the first quarter.
Meanwhile, VAALCO's stock is trading at 11-year lows and closed at $1.93 per share at the end of trading on Wednesday.
Despite its poor stock performance, quarterly losses and six-year low crude oil prices, VAALCO reported a 6 percent boost in production at its offshore oil fields in the West African nation of Gabon.
"We've done everything we can to make the best of a bad situation," VAALCO Chairman and CEO Steve Guidry said during a Tuesday earnings call.
But Group 42 and private investor Bradley Radoff are not satisfied. Together, the two own a combined 11.1 percent of the company's stock and intend to solicit consents from other stockholders to join them in an effort to unseat four board members and replace them.
“It is time for a leadership change at VAALCO that can sustainably rein in the company’s culture of overspending and poor corporate governance," Group 42 and Radoff said in a statement released on Wednesday.
VAALCO fired back by labeling Group 42 and Radoff's recent statements about the oil company's expenses as "misleading" and part of an attempt to "advance their board control agenda."
"The VAALCO Board of Directors and management team remain committed to acting in the best interests of the Company and all VAALCO stockholders," VAALCO said in their statement. "Unfortunately, we believe that the Group 42−BLR Group has intentionally cherry-picked data to misrepresent the well-documented progress we are making to drive value in a challenging environment for the oil and gas industry."
Sergio Chapa covers the energy industry for the San Antonio Business Journal.