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SBOW...Today's news...SilverBow Resources Successfully Executing Strategic Priorities to Drive Shareholder Value
Business Wire

Files Investor Presentation and Sends Letter to Shareholders Highlighting Track Record of Profitable Growth

Board Urges Shareholders to Vote "FOR" ALL of SilverBow’s Highly Qualified Directors on the WHITE Proxy Card

HOUSTON, April 29, 2024--(BUSINESS WIRE)--SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow" or the "Company") today released an investor presentation and mailed a letter to shareholders in connection with the Company’s 2024 Annual Meeting of Shareholders (the "2024 Annual Meeting"). Both will be filed with the U.S. Securities and Exchange Commission. Additional company resources for the 2024 Annual Meeting can be found at www.futureofsilverbow.com.

Highlights include:

SilverBow Has a Strong Track Record of Outperformance: Since 2021, our total shareholder return is 503%, compared to 193% for the XOP E&P Index.1

Management Is Successfully Executing its Proven Strategy: We are generating strong operating results and recently set quarterly records for free cash flow and adjusted EBITDA.2 We expect this momentum to continue; and

The Board Is Acting in Shareholders’ Best Interests: Our Board is composed of independent directors that bring direct industry expertise and public company board and executive leadership experience.

The full text of the letter follows:

Dear Fellow Shareholders,

SilverBow Resources’ Board and management team remain laser-focused on positioning the business to continue driving value for ALL shareholders. Our stock has significantly outperformed the XOP Index over the last several years.

On the other hand, Kimmeridge Energy Management Company, LLC, is running a costly proxy fight to gain control of your Company without paying you a premium for your investment. Kimmeridge has one goal: to force a dilutive, value-destructive combination with Kimmeridge Texas Gas (KTG).

Shareholders should note:

SilverBow Has a Strong Track Record of Outperformance: Since 2021, our total shareholder return is 503%, compared to 193% for the XOP E&P Index. 1

Management Is Successfully Executing its Proven Strategy: We are generating strong operating results and recently set quarterly records for free cash flow and adjusted EBITDA.2 We expect this momentum to continue.

The Board Is Acting in Shareholders’ Best Interests: Our Board is composed of independent directors that bring direct industry expertise and public company board and executive leadership experience.

To protect the value of your investment, using the WHITE proxy card, please vote "FOR" all SilverBow director nominees: Gabriel L. Ellisor, Kathleen McAllister and Charles W. Wampler.

You can learn more about the quality of our Board, positive governance changes and SilverBow’s value creation opportunity at www.futureofsilverbow.com.

Additional information that outlines our strategy can be found in the investor presentation SilverBow recently published at www.futureofsilverbow.com/investor-presentation.

SilverBow’s Proven Strategy Is Delivering Results

Our Board has been overseeing a clear and proven strategy to drive shareholder value by:

Building a scaled and durable portfolio characterized by a deep inventory of drilling opportunities and commodity diversity;

Driving efficiencies and enhancing margins to capture sustainable capital efficiencies and greater margins;

Delivering profitable growth through continued execution of our returns-focused strategy; and

Strengthening the balance sheet and deepening liquidity, with strong free cash flow generation.

The results of this strategy:

Secured decade+ of high-quality drilling inventory with about 1,000 locations across our 220,000 net acres;

Executed a transformative South Texas acquisition in late 2023 that enhanced scale and added important capital allocation flexibility;

Achieved peer-leading cost structure (opex 40%+ lower than peer average and cash G&A 65%+ lower than peer average) and best-in-class margin profile (EBITDA margin 20%+ higher than peer average);

Posted 21% average ROCE (2021-23);

Generated four consecutive years of free cash flow through ongoing capital discipline;

Improved our capital structure through a lower debt, higher liquidity focus; and

Optimized 2024 plan to maximize free cash flow and fund high-return oil and liquids developments.

Our success is being recognized by the market. The Company has outpaced the XOP E&P index since 2021, delivering total shareholder returns of 503% compared to 193% for the XOP E&P Index, as well as outsized returns over one-, three- and five-year periods.1,3

SilverBow’s Highly Qualified Directors Are Also Further Enhancing Our Governance

A strong Board and robust governance practices are critical to sustained value creation. Our legacy existing governance structure was adopted in the aftermath of our 2016 financial restructuring. As our original ownership has changed, our Board is evolving SilverBow’s governance to better align with best practices.

After discussions with our current shareholders, we are proposing significant governance changes at the upcoming 2024 Annual Meeting:

Declassifying the Board and providing for the annual election of all directors;

Adopting a majority voting standard in uncontested elections of directors; and

Eliminating the supermajority vote requirements for shareholders to amend certain provisions of our certificate of incorporation.

We have also continued to strengthen our Board with new skill sets, collective experiences and enhanced diversity.

We have a highly engaged, experienced Board that is working to maximize value. Since 2023, SilverBow has added four highly qualified new independent directors, which we believe gives us the right balance of valuable company knowledge and fresh perspectives in the boardroom. Each director has extensive experience in the energy sector, including Leland T. "Lee" Jourdan, the Board’s most recent addition.

Our three independent directors who are up for election at this year’s Annual Meeting – Gabriel L. Ellisor, Kathleen McAllister and Charles W. Wampler – bring extensive public company board and executive leadership experience. Of note, Kathleen McAllister is a recent addition to the Board, joining in January 2023.

Our Directors Are Independent, Highly Qualified and Not Conflicted

Gabriel L. Ellisor

Significant financial experience developed through 25 years in the finance sector of the oil and gas industry

Extensive M&A experience at Rivington Capital and serving as CFO of two oil and gas acquisition vehicles exited within five years for proceeds of $2.5 billion

Expertise in successfully raising capital at energy companies

Kathleen McAllister

Significant experience overseeing financial and operational functions at large multinational companies

Public company CEO and CFO experience at capital-intensive global companies in the energy value chain

Expertise executing strategic transactions, including leading Transocean Partners’ IPO in 2014

Charles W. Wampler

Significant understanding of E&P company challenges leveraging 40+ years of industry experience

Decades of operational expertise, including working as COO of large multinational energy companies

Track record of overseeing employee safety and minimizing environmental impacts of E&P operations

In contrast to Kimmeridge’s highly conflicted nominees who have a personal interest in supporting Kimmeridge’s dilutive proposal, our directors are focused on delivering value for SilverBow shareholders.

Kimmeridge’s Proxy Fight Is About Forcing a Value-Destructive Combination With Kimmeridge Texas Gas (KTG); Its Highly Conflicted Nominees Are Incentivized to Carry Out Kimmeridge’s Self-Serving Agenda

We have put out extensive information about our two-year engagement with Kimmeridge. This includes reaching a deal on agreed terms, which Kimmeridge ultimately reneged on because they were unable to secure financing. Most recently, Kimmeridge presented a value-destructive proposal to merge KTG with SilverBow which undervalued SilverBow while substantially overvaluing its own KTG assets. The SilverBow Board previously rejected the proposal, determining that it was NOT in the best interests of SilverBow shareholders. SilverBow published our analysis of the proposal in our April 22, 2024 shareholder letter, also available here.

Although Kimmeridge withdrew its proposal, we believe they are pursuing a proxy contest in an attempt to gain control of SilverBow and ultimately force this value-destructive transaction upon our shareholders.

We strongly believe appointing Kimmeridge’s nominees to the Board would jeopardize SilverBow’s proven strategy and business plan and ultimately diminish shareholder value. Kimmeridge’s three nominees – Carrie Fox, Douglas Brooks and Katherine Minyard – are not aligned with all SilverBow shareholders, and we believe the self-interested agenda of Kimmeridge and their nominees risks impeding our progress, ability to pursue non-Kimmeridge related business opportunities and the value we are poised to create for our shareholders.

https://finance.yahoo.com/news/silverbow-resources-successfully-executing-strategic-120000102.html