Claren Energy Corp (CNENF)

[Hamilcar54]

http://www.energynewsbulletin.net/storyview.asp?storyID=826950866§ion=Industry+Moves§ionsource=s74&aspdsc=yes


TROUBLES are continuing for the PEL 112 and 444 joint ventures in the Cooper Basin, with a gang of four rising up to oust the incumbent board at Terra Nova Energy following that company’s recent decision to halt its earn-in plans.


Four new directors have been proposed, to replace the board by major shareholder, Canadian businessman Michael Caetano.


Caetano is asking the shareholders of the Canadian-based oiler to ditch the existing board and vote in himself, Kent Harold Edney, Robert Madzej and Peter Cockcroft at the company’s annual general meeting on July 15.

Caetano is concerned by a recent decision to pause the earn-in with Hollomon Energy Corporation as the JV was moving towards drilling a 2-5 well program on the Western Flank of the basin.

Caetano wants to conduct a new capital raising and conduct a strategic review of recent transactions, which he describes as “concerning”, particularly a transaction between Terra Nova and junior partner Perseville Investing, which sees Terra Nova decreasing its interest in each of PEL 112 and 444 in favour of Perseville.

Perseville, a British Virgin Islands-based corporation, is controlled by Carlo Civelli, who is the father of Terra Nova director Nico Civelli.

Carlo Civelli was appointed as a senior adviser to Terra Nova on March 5, 2014.

Caetano understands that prior to this purchase Perseville had acquired a 25.83% working interest in PEL 112 and 444 from third parties for a purchase price of $2.1 million.

Terra Nova had an option to move to 55%, but in February announced a capital injection of $3 million from Perseville for a 5.166% working interest in each block.

At that time the PEL JV intended to move ahead with all guns blazing under Terra Nova’s operatorship, however three months later Terra Nova announced it would no longer use its option to move to 55% and would sit at its current equity.

The company blamed the current oil environment and concluded there is potential to generate higher returns for its shareholders by funding a smaller proportional share in exploration costs.

But Caetano is concerned that the termination of the agreement prevents Terra Nova from increasing its interest, and dilutes it to about 20%, at a time when Perseville can increase its own interest in PEL 112 and 444, especially as Terra Nova announced reduced costs for the planned drill campaign.

He said the actions are not in the best interest of Terra Nova and have benefited insiders of Terra Nova through their relationship with Perseville.

If the gang of four is elected they want to discuss terms with Hollomon to restore Terra Nova’s right to increase equity, in PEL 112 and 444, forensically examine recent decisions with Perseville to determine compliance with corporate and securities laws, and raise the cash to needed drive the exploration programs.

Caetano is an executive at Canadian real estate concern Skyline Custom Homes and oiler Strongbow Resources.

Of the three other nominees, the best known name to Australian investors is industry veteran Peter Cockcroft.

The Singaporean-based businessman was a founding director of Kuwait Energy Corporation, the largest private oil company in Kuwait, and in recent years has served as the chairman of ASX-listed oilers Blue Energy and Baraka Petroleum, with directorships of Australian Oil Company, European Gas, Nuenergy Gas, Arturus Capital and Kairiki Energy.

He has worked for BHP Petroleum, Premier Oil, Shell, and the national oil companies of Indonesia and Korea as well as the energy adviser to the President of East Timor from 2002 until 2007.

Edney is a petroleum engineer with more than 10 years’ experience with firms including Epic Consulting Services (now part of Baker Hughes), Thunder Energy, Breaker Energy and NAL Resources.

He has been chief operating officer of Strongbow since April.

Madzej has over 10 years of experience in business development and finance, and has been a director of Strongbow since 2013 and was Edney’s predecessor in the COO role.

Terra Nova had less than $C280,000 in cash at the end of January, but was due a $3 million payment from Perseville.

PEL 444 sits north of PEL182, host of the Vanessa gas discovery, and PEL11, host to the Snatcher-Charo oil fields.

PEL 112 is further south, on trend with the Butlers, Perlubie and Parsons oil fields.