OIL - Kimmeridge Releases Presentation Outlining the Urgent Need for Board Change at SilverBow | Benzinga
Details SilverBow's track record of underperformance, value-destructive acquisitions, broken governance, and entrenchment maneuvers
SilverBow needs experienced, independent directors who are open to assessing all value enhancing alternatives to capitalize on its limited window of opportunity to create significant long-term shareholder value
Urges shareholders to vote "FOR" all three of Kimmeridge's highly qualified, independent nominees to SilverBow's staggered board on the GOLD proxy card
NEW YORK and DENVER, April 29, 2024 /PRNewswire/ -- Kimmeridge, an alternative asset manager focused on the energy sector and the largest shareholder of SilverBow Resources ("SilverBow" or the "Company") holding 12.9% of outstanding shares, today released an investor presentation detailing the urgent need for change at SilverBow to strengthen Board oversight and enhance long-term value creation for all shareholders at this critical inflection point in the E&P industry.
"Since 2020, Kimmeridge has been actively involved in over 13 publicly listed companies, representing nearly 10% of total US oil and gas capacity," said Ben Dell, Managing Partner at Kimmeridge. "Each of those companies has actively engaged in constructive dialogue and embraced changes to drive significant, sustainable returns to shareholders. SilverBow represents the outlier. This Board and management team have consistently feigned engagement and misrepresented the facts – underscoring why the Company trades at a significant discount to its peers. It appears clear to us that shareholders are tired of this self-serving, value destructive approach as we have seen other shareholders openly express their desire for change on the Board."
In recent weeks, SilverBow has made misleading claims regarding Kimmeridge's engagement and intentions, as well as the Company's own track record, that require an honest assessment. To address just a few examples from the Company's most recent April 22, 2024 Letter to Shareholders:
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SBOW's Claims1 |
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The Facts |
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"Kimmeridge launched a proxy fight to facilitate a path to change control of the Company without paying a premium to SilverBow shareholders" |
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Kimmeridge's directors are "conflicted nominees that can force a combination that would destroy SBOW shareholder value" |
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"Our [SBOW's] strategy has proven to be resilient through market cycles and has delivered significant shareholder value" |
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To advance the best interests of all SilverBow shareholders and challenge the existing Board's status quo mindset and commitment to insulating itself from shareholder accountability at all costs, Kimmeridge has nominated three highly-qualified, independent director candidates – Carrie Fox, Douglas Books, and Katherine Minyard – for election at the May 21, 2024 annual meeting of shareholders (the "Annual Meeting").
The full presentation, SilverBow Resources: A Board in Need of Change, can be found here.
Select highlights of the presentation include:
I. SilverBow's Chronic Underperformance and Value-Destructive Capital Allocation
SilverBow's shares lag peers and appear to be largely irrelevant to public equity investors:
- SilverBow sits in the bottom 10% of the XOP3 in terms of market capitalization.
- SilverBow has the lowest EV/EBITDA multiple of its peer group.
- The Company trades at a paltry EV / NTM EBITDA multiple of 2.4x when its peers4 are trading at 4.4x on average – this discount has widened to 2.0x today from 1.5x three years ago.
- SilverBow's lack of scale, restrictive balance sheet, and poor governance have put the Company in danger of being left further behind.
- SilverBow's current Board and leadership team have a ...