Cation Capital, a private investment firm led by the former deputy head of global oil and gas at Macquarie Group, said on Monday it intends to nominate four candidates to Crescent Point Energy’s board at a shareholders meeting next month.
Cation said it was “compelled to take this action given the significant destruction of shareholder value and the abject failure of the Canadian oil producer’s current leadership across all aspects”.
The firm, which does not have a website and could not immediately be reached for additional comment, said it has been talking to a special committee of Crescent’s board, but that discussions have failed to result in “meaningful progress.”
Crescent Point, in return, said Cation’s last-minute demand was unreasonable and reckless, adding that the firm “appears to have been created for the sole purpose of creating conflict and havoc.”
“We, therefore, believe Cation lacks credibility and is engaged in an ill-conceived and self-serving exercise,” Crescent Point said in a statement.
Cation’s move comes as Calgary-based Crescent Point struggles to rein in costs. The oil and gas producer’s operating expenses rose 5.4 percent in the fourth quarter ended Dec. 31, and it has been selling non-core assets to fund its capital spending program and pay down debt.
On Monday, Cation said its director nominees hold, or exercise control of 1,478,772 common shares, representing 0.3 percent of the company’s total common shares, Reuters could not immediately determine Cation’s total stake in the company.
“Notwithstanding poor corporate performance over recent years, remarkably executive compensation has ballooned, with an increase of 17 percent in total compensation since 2016,” Cation’s President Sandy Edmonstone, who oversaw global energy platform operations at Macquarie, said in a letter addressed to Crescent Point’s board last week.
Toronto-listed Crescent Point’s shares have fallen about 47 percent in the last 12 months, compared with an 8 percent rise in the Canadian Energy Sector Index.