Brisbane, Australia (ABN Newswire) - In view of the weak oil market with limited prospect of a significant recovery in the short term, the Board of Pryme Energy Limited (ASX:PYM) has resolved to make a number of Board and management changes and to take other actions considered necessary to place the business in the best position for shareholder value creation.
The Board has resolved the following initiatives:
1. Management Changes
a. reflecting the US base of Pryme's operations:
i. the position of an Australia based CEO has been made redundant. Mr Justin Pettett shall leave the employ of the Company but will remain as a Non-Executive Director; and
ii. the US based COO position has also been made redundant. Mr Ryan Messer will also leave the employ of the Company but will remain as a Non-Executive Director.
b. in the interest of further reducing costs, the position of CFO has been made redundant effective 15 March 2016, and the Company will outsource the reduced accounting functions thereafter.
Under their Executive Service Agreements and as disclosed previously in the Company's Annual Report, upon redundancy, Messrs Pettett and Messer are entitled to receive a payment equal to 12 months' salary plus 1 month's salary for each completed year of service. Messrs Pettett and Messer have voluntarily foregone this second part of their redundancy repayments, each being an amount equal to 10 months' salary.
2. Board Changes
a. Mr George Lloyd will resign as Chairman and Non-Executive Director effective 31 December 2015;
b. Mr Daniel Lanskey will be appointed Chairman effective 31 December 2015;
c. as noted above, Messrs Pettett and Messer will cease their roles as Executive Directors and will become Non-Executive Directors of the Company;
d. Board fees will be reduced to A$30,000 per annum for each Non-Executive Director (Director Fee); and
e. Mr Messer will be required to continue to manage the existing operations of the Company; depending on the work to be performed, in addition to his Director Fee, Mr Messer may be paid a special exertion fee from time-to-time as permitted by the Company's Constitution.
3. Other Actions
a. Capitola Oil Project
Shareholders have previously been advised that the Company was considering the sale of an interest in the Capitola Oil Project to release cash and accelerate development of the Project. Whilst there is significant third party interest in the Project, it is unlikely that any incoming partner would fund the drilling of additional wells in the current oil price environment; furthermore, the Company considers that to raise additional cash for drilling wells through the equity capital markets is not currently feasible and in any case would be unacceptably dilutive of shareholders' interests. Accordingly, the Board is now considering the outright sale of the Project to build cash reserves.
In view of their future positions as Non-Executive Directors, the Board has determined that Messrs Pettett and Messer should be incentivised to procure the sale of the Capitola Oil Project on the best possible terms. Accordingly, an entity associated with Messrs Pettett and Messer will be paid a fee of 5.0% of the net proceeds of any sale of the Project upon completion of the sale. The non-interested Directors have satisfied themselves that this fee reflects appropriate arm's length terms for such a transaction.
b. Other Assets and Business Activities
The Board will conduct a review of Pryme's business and its other oil and gas assets to consider and determine how best to build shareholder value for the future. It is anticipated that this review will be completed by 31 March 2016 and the market will be kept apprised accordingly.
About Pryme Energy Ltd:
Pryme Energy Limited (ASX:PYM) (OTCMKTS:POGLY) is an Australian listed company engaged in oil and gas exploration, development and production. Pryme's project portfolio includes liquid rich producing assets together with substantial oil development and exploration acreage in the United States.
The Company's Exploration and Production focus is on high growth oil and gas projects offering scalability of production, cash flows and reserves. Pryme currently has several producing projects together with a significant acreage position. The Company's immediate focus is the development of its Capitola Oil Project located in an active region of the Cline Shale resource play along the Eastern Shelf of the Permian Basin, Texas. The project's core development and exploitation opportunities are shallower multiple "stacked" sandstones and limestones to depths of 7,000 feet which are effectively produced from vertically drilled wells. Pryme's value driven model is executed through exploiting shallower, well defined intervals with advanced completion and stimulation technology within known produced oil fields together with exposure to the emerging Cline Shale resource play.
Pryme's shares are publicly traded on the Australian Securities Exchange (ASX ticker: PYM) and also as American Depositary Receipts on the OTCQX (ADR ticker: POGLY).
Pryme Energy Ltd
Mr George Lloyd
Pryme Energy Limited
T: +61 7 3371 1103
Source: ABN/Asia Business Newswire
(December 20, 2015 - 5:47 PM EST)
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