Eagle Energy Inc. Announces Independent Advisory Firm Recommendation Supporting a Vote on Eagle's YELLOW Proxy and Additional Cost Reduction Initiatives
Eagle Energy Inc. ("Eagle") announces Institutional Shareholder Services Inc. ("ISS") recommendations for voting and additional cost reduction initiatives.
ISS Recommends Yellow Proxy
ISS, a leading independent advisor to institutional investors on corporate governance and proxy voting analysis, has recommended that shareholders vote using only Eagle's YELLOW proxy for the majority of Eagle's current directors and DO NOT VOTE the dissidents' blue proxy.
In its report dated June 14, 2017, ISS gave the following reasons why shareholders should NOT vote for the dissidents' blue proxy (emphasis added):
Cost Reduction Plan
Eagle's 2017 capital and operating budget assumed an average WTI price of $US 55.46 per barrel of oil. In response to significantly weaker current oil prices, Eagle has decided to accelerate cost reductions.
For 2016, Eagle was a top quartile performer in reducing year-over-year general and administrative costs ("G&A") by 16%. In addition, Eagle budgeted and is on track to realize a further 16% year-over-year reduction in G&A in 2017.
Now, with lower oil prices prevailing, Eagle has embarked on additional G&A reduction initiatives aimed at further material reductions. Eagle's plan is comprehensive and includes cost reductions targeting office and overhead, corporate travel, a review of all employee and Board compensation and potential staff reductions. As a first step, within the next 60 days, Eagle intends to implement material reductions in executive compensation, including materially reducing the CEO's compensation. Eagle intends to update our shareholders on the progress of this initiative.
Clarification of Previous Statements
Eagle wishes to clarify that Mr. Wisniewski's quote in the March 13, 2017 press release, which stated "Eagle doubling production and reserves within the next 24 to 36 months", was not referring to the execution of Eagle's internal five year strategic growth plan; rather, it was referring to potential additional capital that Eagle might obtain from a financial partner the size of White Oak Global Advisors, LLC (Eagle's lender) to assist with future acquisitions. There are no guarantees that (i) Eagle will find suitable acquisitions, (ii) White Oak Global Advisors, LLC will provide additional financing for such acquisitions, or (iii) additional financing will be economically feasible to Eagle.
Whether or not Eagle finds and finances suitable acquisitions does not prevent Eagle from executing its five year strategic growth plan, which includes the development of our North Texas asset. Eagle believes its plan will more than double production and reserves, and see Eagle at less than one times debt to cash flow within five years1, while drilling less than one third of its existing inventory.
Support Eagle's Current Board to Ensure Eagle's Future Success
Eagle's directors possess the expertise required for Eagle to execute its plan.
Eagle's Annual General Meeting of shareholders is scheduled for 10:00 a.m. (Calgary time) on Tuesday June 27, 2017 at the Metropolitan Centre at 333 – 4th Avenue SW, Calgary, Alberta.
About Eagle Energy Inc.
Eagle is an oil and gas corporation with shares listed for trading on the Toronto Stock Exchange under the symbol "EGL".
All material information about Eagle may be found on its website at www.EagleEnergy.com
SOURCE: Eagle Energy Inc.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.