Industry professionals envision an increase in shareholder
activism in light of falling prices and growing activist investor
Chad Brownstein, CEO of Rocky Mountain Resources, commented on
CNBC's "Closing Bell" that
"[w]hat you're going to see in the market in 2015 is an
immense amount of activists turning their guns toward oil
companies." Brownstein noted that smaller oil companies
in particular will face increasing vulnerability to hedge fund
activism with pushes for consolidation, asset sales and management
changes at the top of the activist agenda.
Ernst and Young's most recent bi-annual "Oil and Gas: Capital Confidence
Barometer" (the E&Y Report) highlighted the growing
influence of shareholder activism in boardrooms of major oil and
gas companies. The E&Y Report identified cost management,
portfolio optimization and returning cash as key areas of focus for
The E&Y Report also noted that companies are managing
shareholder activism by enhancing communications with stakeholders,
monitoring early warning signs for activist pressure and conducting
ongoing portfolio reviews to grow revenue, increase margins and
In the National Post, Stephen Griggs, CEO of
Smoothwater Capital, a Toronto-based activist fund, stated that
"[y]ou'll see more activism in oil and gas as it's
easy to value the assets". He added that "[y]ou
have significant capital costs that need to be incurred in order to
drill wells, you have companies leveraging themselves up, which
If the current low-price landscape holds steady, it is also
expected that mergers and acquisitions will become central to the
activist dialogue in oil and gas going forward.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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