Oil | Dana Petroleum 2010 Annual General Meeting - Detailed Writeup And Notes

1st Jul '10 by Cuthbert C

4 comments 4602 reads

The 2010 AGM for Dana Petroleum Plc (LON:DNX) – it was their 13th if you are superstitious - took place on June 14th at the Marcliffe Hotel in Aberdeen. The AGM presentations and discussions covered a great deal of material so I’ll give you bullet points rather than full text. What I’m aiming to do here is report the facts as stated at the time and leave you to draw your own conclusions. I should start by explaining that attendance required me to get up at 4am so as to check in at Luton by 6:15. Chaos in the security check area meant I reached the gate only just in time and was one of the last people to board. As luck would have it I found a seat next to Marben who was also making the pilgrimage. As always, his company improved the journey immensely.

At the Marcliffe Hotel, Marben unleashed his inner boa-constrictor by wrapping himself around a full scottish breakfast considerably larger than himself. If my wife reads this, please note that I contented myself with a pot of excellent tea (I’ve had their coffee before) whilst I tried to lip read the nearby table where Chairman Colin Goodall was holding court with others from Dana. I failed. It must have been the scottish accents. Or the porridge.... Anyway – let’s move on to the proceedings:

Present

There was the entire board of Dana – both executives and non-executives - as well as advisors to the company – including remuneration consultants and the registrars. There were about25-30 people who looked like private shareholders including some bulletin board regulars (Emptyend, Marben, King McKong, Jonnylite, etc. Sorry to those whose names escape me – it’s not you, it’s me) and then about 10 people in smart suits who might have been advisors or institutional investors (or simply members of staff gussied up in their best outfits).

Introduction - Colin Goodall Chairman

AGM Presentation Part 1 – Tom Cross CEO

I have a feeling that up in the attic of Cross Castle there must be an oil painting that is looking the worse for wear, with paint flaking off and cracks and creases spreading inexorably as the frame slowly crumbles. Its subject looks thinner and fitter every year. He used to be about my age (well just a little younger) but these…

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nigelpm

1st Jul '10

Stonking write up Tournes!

I almost (!!) hope KNOC don't get hold of Dana so that one isn't the last AGM as a couple of days in Aberdeen next year could be a lot of fun.

doverbeach

Great write up, esp the restaurant reviews explo table - much appreciated and fingers crossed for Anne-Marie!

One small comment, you say Arran (Baraba/Phyllis) is expected first gas Q4 2012. This is going through the new Lomond facility, where Serica are quoting 'early 2013'. So not much difference :)

AbAngus

Bloomin' heck - what an amazingly good write up! Thanks.

emptyend

Yes - excellent write-up T.

In order to round things out I might just make reference to questions raised in the formal session and afterwards:

The Tournesol/Marben/Emptyend group in the second row asked more than their fair share of questions. The main one I recall was querying the comparator group being used for the LTIP and salary benchmarking - and I pointed out that this group was vastly too wide and included a whole raft of MAJOR energy companies, with whom salaries (in particular) were being compared (reasonably favourably, despite the private claims of a director I won't name ;-)). Shareholders will be pleased to know (in the light of the possible need to negotiate with a potential bidder, announced today) that Tom Cross's new lean demeanour appears to be the result of interbreeding a strain of racing whippets with a Staffordshire bull terrier - as he quickly bared his fangs and leapt to his own defence! Nevertheless, I think the points I made were extremely apposite and were taken on board by the board - and by the remuneration consultant whom I buttonholed for a very lengthy chat afterwards!

Of more interest perhaps, in the light of today's developments, is the fact that I had a one-on-one chat with Tom Cross just before everyone decamped for lunch. In particular, I was talking about investor relations and the need to get the message out to analysts - most of whom don't really understand the company. Tom had just hired a full-time IR person with this in mind and it was clearly a priority. Discussion then moved on to me making the point that Dana was extremely vulnerable to a bid in present circumstances, being quite out of favour amongst the peer group and very undervalued relative to most analyst estimates of NAV....and especially with the well at Anne Marie (which could be very much larger than the market thinks, as there are multiple targets) yet to spud. This was something he agreed with and, intriguingly in retrospect, we went on to agree that probably what will happen at some point is a step-change repricing of Dana's shares, triggered either by a bid approach or by drilling success. I have formed the view over the last 9 months that Dana/Tom has recently become more amenable to the idea of selling out completely (having previously vehemently opposed it), so I wasn't surprised to hear that - and I assumed that they were equally likely events over the course of the next few months. My conclusion at the time was that there had been no bid approach by the time of the AGM, though today's announcement (following so soon after the AGM) makes me wonder whether there was already some inkling of bid approaches (and perhaps whether that triggered the IR hiring).

Anyway - very interesting AGM (as usual) .......and I have the feeling that some of us may well be reconvening at an EGM in a few weeks time, now that the potential agenda could be a bit more interesting than just a nod-through of the Dutch acquisition.

I'd also note, by the way, that the bid approach should be non-negative for the rest of the FTSE350 peer group, several of whom are equally (or even more, in one or two cases) vulnerable....so we might be in for a very interesting period, as there are certainly a munber of potential bidders circling around the E&P space - and there may be a few of them under pressure to find a strategic response to the implications of the BP incident for those who have deepwater strategies?

Dana Petroleum 2010 Annual General Meeting - Detailed Writeup and Notes

Present

Introduction - Colin Goodall Chairman

AGM Presentation Part 1 – Tom Cross CEO

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Cuthbert C

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