Glass
Lewis & Co. Recommends Withholding Votes on Two Management Nominees and
Supports the Election of New Independent Directors
Thursday
May 22, 12:56 pm ET
Notes
That VAALCO's Dismal Stock Price Performance and Declining Earnings May Benefit
From the Presence of New Independent Directors
Nanes
Delorme Partners Urges Stockholders to Vote the GOLD Proxy Card "FOR" Julien
Balkany, Leonard Toboroff and Clarence Cottman III
NEW
YORK--(BUSINESS WIRE)--Nanes Delorme Partners I LP ("Nanes Delorme Partners")
today announced that Glass Lewis & Co., a leading independent voting
advisory service, has recommended that stockholders of VAALCO Energy, Inc.
("VAALCO" or the "Company") (NYSE: EGY - News) withhold their
votes on management nominees Arne Nielsen and W. Russell Scheirman in order to
provide the opportunity for Nanes Delorme Partners’ independent directors to be
elected to the Company’s Board of Directors.
Nanes
Delorme Partners urges VAALCO stockholders to vote the GOLD proxy card to elect
Mr. Julien Balkany, Mr. Leonard Toboroff and Mr. Clarence Cottman III to the
Board of Directors at the Company's 2008 Annual Meeting of Shareholders
scheduled to be held on June 4th, 2008.
Julien Balkany, a Managing
Member of Nanes Balkany Partners LLC, the General Partner of Nanes Delorme
Partners, stated: “We are very pleased that
Glass Lewis, an independent proxy advisory service, supports immediate change to
VAALCO’s current Board of Directors and agrees with our position that new
independent representation on the Company’s Board is necessary. Moreover, we are
astounded that VAALCO is attempting to mislead its stockholders by suggesting in
today’s press release that this is somehow a victory for the Company – it’s a
clear recommendation for change at the Board level.”
In its
analysis, Glass Lewis noted:
“In this
case, we agree with many of the Dissident’s concerns, especially concerning the
Company’s stock price performance and valuation relative to its peers. In
addition, we are concerned that the board recently adopted a shareholder rights
plan, an action which we believe is clearly contrary to the interests of the
shareholders.”
“We find
that the Company’s stock price has drastically underperformed its peers in
recent years. During the one year period prior to the announcement of the proxy
contest, the Company’s stock price fell by approximately 11.2%, compared to the
gains of approximately 12.6% and 46.8% by the peer composite and the S&P Mid
Cap Oil & Gas Exploration & Production Index respectively (source:
FactSet).”
“During
the three year period prior to the announcement, the Company’s stock price
increased by approximately 5.9%, compared to gains of approximately 51.8% and
79.5% by the peer composite and the S&P Mid Cap Oil & Gas Exploration
& Production Index, respectively.”
“In
addition, we agree with the Dissident that the Company is undervalued compared
to its peers. For each of the past five fiscal years, we find that the Company’s
multiples of enterprise value to revenue, enterprise value to EBITDA and price
to earnings fall substantially below the mean and median multiples derived from
the peer set (source: FactSet).”
“We also
echo the Dissident’s concerns that the Company’s earnings per share have
generally decreased on a quarterly basis since the third quarter of 2006,
despite increasing revenues. Net income fell by approximately 52.9% from fiscal
2006 to 2007.”
“…we see
that these measures of the Company’s operating performance have also worsened
over the past year. Despite a 27.2% gain in revenue from fiscal 2006 to 2007,
the Company’s EBITDA margins, operating margins, and net margins all declined
during this period. In addition, the Company’s ROE and ROA have both declined
steadily on an annual basis from fiscal 2004 to 2007.”
“The
board’s decision to adopt a poison pill without first seeking shareholder
approval leads us to question whether the board is truly acting in the best
interests of shareholders. Given this recent action, combined with the Company’s
dismal stock performance and declining earnings, we believe the board may
benefit from the presence of new independent directors.”
“Based on
the above reasons, we recommend withholding votes from the following management
nominees: Nielsen and Scheirman.”
“In
addition, Mr. Scheirman serves as president and CFO of the Company. We believe
that the unique financial information and control over a Company’s finances that
is typical for a CFO should place the CFO in the position of reporting to and
not serving on the board.”
“We
believe that withholding votes from Messrs. Nielsen and Scheirman may provide
the opportunity for two Dissident nominees to be elected to the
board.”
“…and
would send a strong signal to the Company that the Company’s performance and
corporate governance related issues need to be addressed.”
Nanes
Delorme Partners strongly encourages VAALCO’s stockholders to sign, date, and
return the GOLD proxy card and vote “FOR” Julien Balkany, “FOR” Leonard Toboroff
and “FOR” Clarence Cottman III.
Stockholders
who have questions, or need assistance in voting their shares, should call Nanes
Delorme Partner’s proxy solicitors, MacKenzie Partners, Inc., Toll-Free at (800)
322-2885. For more information on how to vote, as well as
additional proxy materials, please visit www.ImproveVAALCO.com.
About
Nanes Delorme Partners I LP
Nanes
Delorme Partners I LP is a U.S.-based hedge fund that invests primarily in the
oil and gas exploration and production sector. Nanes Delorme Partners I LP
pursues active investments in publicly traded companies that it believes are
trading at a significant discount to their intrinsic values or where one or more
potential catalysts exist that could materially unlock the inherent value of
those companies.
The
General Partner of Nanes Delorme Partners I LP is Nanes Balkany Partners
LLC.
Contact:
Media:
Sard
Verbinnen & Co.
Paul
Caminiti/Dan Gagnier/Jane Simmons, 212-687-8080
Source: Nanes Delorme Partners I LP