Energy Summary - 2ndComment in "Energy Summary":
Alberta Cardium producer Obsidian Energy Ltd. (OBE) edged up two cents to 65 cents on 158,700 shares, after shaking up its management. It has appointed one of its directors, Stephen Loukas, as its next interim president and CEO. He is not the permanent president and CEO; Obsidian has not had one of those since March. Director Mike Faust was appointed interim president and CEO in March, but made clear that this was a very temporary engagement. Now Mr. Faust is returning to his director-only seat and Mr. Loukas is stepping up to the helm.
Mr. Loukas is an interesting choice for Obsidian. The press release does not go into his background, but many investors will know him as a portfolio manager and co-founder of FrontFour Capital, a hedge fund run by Zachary George (son of the late Rick George, who used to be Obsidian's chairman). FrontFour owns about 3.8 million of Obsidian's 72.9 million shares. It has been an investor since 2013, though it did not start to draw attention to its position until late 2017, when an EDGAR filing revealed two things. One, FrontFour owned about 5.5 per cent of Obsidian's shares, and had spent over $33-million (U.S.) acquiring that position. (These days it owns about 5.1 per cent and the entire position is worth a painful $2.45-million.) Two, FrontFour was already nagging Obsidian about its "strategy and board composition ... [as well as] a broad range of strategic and operational matters." This culminated in a full-fledged dissident battle, which ended on friendly enough terms in April, 2018, when Obsidian agreed that its board would include two nominees of Frontfour -- the above-mentioned Mr. Faust and Mr. Loukas. "We believe in Obsidian Energy's significant potential," said Mr. Loukas at the time. The stock has lost about 93 per cent of its value since he said that. He had no comment in the press release today.
This was not Obsidian's only management change. It has also hired Peter Scott as its chief financial officer, replacing David Hendry, who announced his departure in October. Obsidian noted that Mr. Scott has been serving as a CFO of various companies for over 20 years. Somewhat inexplicably, the only one that Obsidian chose to name was Lightstream Resources, a company that dazzled (so to speak) primarily for its turbulent descent into insolvency. Lightstream was a Western Canadian producer that traded as high as $36 in 2009 but was worth just 11.5 cents when it stopped trading in 2016 and sold off its assets to a private company. Obsidian opted to leave that part of the story out."