Canadian Superior Energy (SNG)

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The Canadian Press - ONLINE EDITION
Canadian Superior Energy caps off turbulent year by electing new board

By: Lauren Krugel, THE CANADIAN PRESS

9/09/2009 7:00 PM | Comments: 0

CALGARY - Canadian Superior Energy Inc. (TSX:SNG) shareholders elected a new board of directors Wednesday, capping off a turbulent year for the Calgary-based oil and gas explorer.

Shareholders also approved a merger agreement between Canadian Superior and Challenger Energy Inc. (TSXV:CHQ), which had been a minority partner in a natural gas development off the coast of Trinidad and Tobago.

The deal was approved by 95.4 per cent of the shares voted.

Palo Alto Investors LLC, which holds 9.3 per cent of Canadian Superior's stock, has been pushing for change at the board level for several months.

Under a settlement inked last month, Canadian Superior, which has been restructuring under creditor protection since March, and Palo Alto Investors agreed on six nominees for the board of directors.

Palo Alto picked Marvin Chronister, Kerry Brittain, James Funk, and William Roach, who is chief executive officer at oilsands firm UTS Energy Corp. (TSX:UTS)

Canadian Superior's management tapped Gregory Turnbull and Richard Watkins, who currently sits on the board of directors.

"These are the kind of people that I, as a shareholder, am happy to see run the company," said Palo Alto's David Anderson in an interview before the meeting.

"We think this can be a great company. It has the potential to be."

Aside from interim chairman Jake Harp, none of the outgoing directors were at the meeting Wednesday.

Chronister, a newly elected director from Houston with 35 years in the oil and gas industry, said the board will begin its work in earnest Thursday, when its first meeting is set to be held.

"I think we need to focus on getting a top rate management team in and filling in the management holes ... and then figuring out how to maximize the assets that we've got for the benefit of the stockholders," he said in an interview after the meeting.

It was just under a year ago that Palo Alto began flagging conflict of interest concerns at Canadian Superior.

Palo Alto's qualms centred around Canadian Superior's then-executive chairman Greg Noval, who had also been a director at Challenger.

Noval stepped down from his director position at Challenger in October of last year, but continued to be a shareholder in both companies.

In a separate battle in February, a third partner in the Trinidad block, U.K.-based BG Group, persuaded an Alberta judge to put Canadian Superior's stake under the control of a receiver.

BG had feared final testing and completion of a well would not be completed, given Challenger's and Canadian Superior's financial problems.

A month later, Challenger and Canadian Superior both filed for protection from creditors under the Companies' Creditors Arrangement Act.

In late April, Noval and chief executive officer Mike Coolen were forced out by Canadian Superior's board of directors.

In May, Canadian Superior sold its 45 per cent stake in the Trinidad field, which is estimated to contain between three and five trillion cubic feet of natural gas, for US$142.5 million to BG Group.

And then in June, Canadian Superior agreed to merge with Challenger in a friendly deal worth $77.8 million.

Following those transactions, Canadian Superior now holds a 25 per cent interest in the Trinidad block.

Palo Alto had questioned the previous management's decision to sell the Trinidad stake, and now Anderson said he's optimistic shareholders will be able to reap the benefits.

"If we didn't see that upside, we would have sold this stock long ago," he said.

"The only reason we've gone through the pain and suffering of the last year is to put in place a team that can actually create that value."

In addition to Trinidad, Canadian Superior also has operations in Western Canada and the East Coast.



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