FrontFour Capital Update to Shareholders of RPL GREENWICH, CONNECTICUT, Oct 31, 2013 (Marketwired via COMTEX News Network) -- On October 21st, 2013 FrontFour Capital Group LLC ("FrontFour") and
a like-minded shareholder (the "Requisitionists") announced that they
had served the board of Renegade Petroleum Ltd. ("Renegade", or the
"Company") with legal notice of their requisition of a special
meeting of shareholders. FrontFour also demanded the disclosure of
fees paid to the Company's advisors and any arrangements with current
directors that include payments of finder's fees or success fees that
are or were payable.
Ten (10) days have passed and the Company has made no effort to
communicate with FrontFour or address shareholder concerns. The
Company has provided no public communication with respect to
selecting a special meeting date or disclosing advisor and insider
fees. This refusal to engage with the true owners of the Company is
deeply troubling. The current board has overseen the destruction of
substantial shareholder value, has upheld poor standards of corporate
governance, and has neither a strategy nor management team. Given
Renegade's alarming lack of insider ownership and track record of
corporate waste, FrontFour is concerned by the board's potential
willingness to use shareholder funds to fight the shareholders of the
Company.
During the last ten (10) days, FrontFour has continued to purchase
shares of Renegade. In addition, according to Bloomberg, over the
same time period approximately seven percent (7%) of the outstanding
shares of Renegade have been traded. FrontFour has also received
scores of unsolicited emails and calls from both institutional and
retail investors who are demanding change. The Requisitionists intend
to engage these shareholders directly following the filing of their
circular and related proxy materials.
FrontFour believes that Renegade shares trade at a significant
discount to net asset value and will continue to do so as long as the
status quo is maintained. Recent transactions have confirmed this
view. One day after the Requisitionists served the board of Renegade
with their legal notice of their requisition of a special meeting of
shareholders, a peer of Renegade completed two light oil acquisitions
(the "Acquisitions") for a total purchase price between $303.6
million and $306.9 million. The production and growth profiles of the
Acquisitions are similar to those of Renegade. To compare the
Acquisitions to Renegade, FrontFour used street consensus estimates
for net debt and debt adjusted cash flow. The price per share of
Renegade implied by the Acquisitions is $1.43 to $3.88 depending on
the respective metric utilized, representing a potential shareholder
return of approximately 30% to 252%. It is worth noting that the
reserve life index for the Company is 11.8 years compared to the
Acquisitions of 9.2 years, with net drilling locations of 323
(Renegade's October 2013 presentation) versus the Acquisitions of
184.