This is a copy of the letter from Abraham Limited Range Resources Major share-holder, explaining why they voted out the Rory ‘stories’ Scott Russell #storyteller and his band of merry men! Apparently the Range Resources Nomark, oops sorry.. Nomad stopped the female representative from Abraham reading it out!
AN OPEN LETTER TO ALL THE SHAREHOLDERS
Ladies and Gentlemen,
Today, at the Annual General Meeting, Abraham limited, as the largest shareholder, have voted “against” to the re-election of most directors.
Based on full trust in the board, the management and the promising development prospects of Trinidad blocks, we subscribed the shares of Range. We hoped our investment would relieve the financial distress of Range and attract more funds to be invested in Range, so that the company could achieve the expected production in Trinidad and improve the operating status.
Unfortunately, the board and the management disappointed us. They failed to fulfill our expectations, and the company’s operating situation has not changed substantially. As a result, the company’s stock price continued to fall which caused serious damage to the interest of shareholders. Abraham Limited, same as other shareholders, not only has the feeling of suffering, but hopes to work corporately with other investors to make our efforts to the development of Range and make our sincere suggestions and advices well heeded.
We are very grateful to the efforts made by the management of the company, but we believe that the existing management is not sufficient in the near future to achieve the strategic goal. Firstly, because of inefficiency, no progress was made in the incremental production plan in Trinidad. The company declared an incremental production plan for the blocks in Trinidad in May 2014. However, as of today, we haven’t seen any substantial progress and significant increase in oil and gas production. Thus, the long-term interest of shareholders cannot be guaranteed; Secondly, the general and administration and finance costs are too high, the company’s operation has gone into a further deterioration.
In 2014 fiscal year, the total general and administration expenses and finance costs are over USD 36 million, with an increase of 18.85 million compared with last year. On this occasion, the board still requires to increase the remuneration. Furthermore, there was no improvement on the financing although the management keep complaining the lack of investment in drilling rigs. Apart from some high-cost bridging loan, they were not able to introduce a large amount of high quality funds to improve the company’s financial status. If we turn a blind eye to this situation, it will be difficult for the company to realize profit, the interests of shareholders will suffer further damage.
For the above reasons, we rejected the re-election of most directors, only David Noel Riekie and Ian Peter Olson remained. We believe that our decision and new management will lead the company to achieve sustainable development. The international crude oil price is declining, in the next two years, Range may face severer test of market competition. We will try our best to adapt the operating strategy to the changed internal environment, external market conditions and reduce the management cost. The goal is to make a profit and maximize the benefits of the whole shareholders.
Introducing professional management and bringing the company back on track. We will keep focusing on the core business, oil and gas exploration, production and sales. To keep the business and management on track, we will introduce international management with rich experience both in oil and gas development and corporate governance.
Optimizing capital structure and lowering the financial cost. We have the faith that we are able to introduce qualified investors to help the company to optimize the capital structure, replenish the working capital and reduce the finance costs.
Carrying out the incremental production plans and making a profit. I do believe that we have the ability to assistant Range to conduct the incremental production plans, and increase the working efficiency by technical methods to increase production in a short time and achieve our expectation.
Merging new projects and seeking new growth opportunities. We will take the advantage of the downtrend of oil price and look for suitable oil and gas resources on a global scale, so that we could mitigate the risk of operating single oil field and guarantee the long-term growth of the company.
As the largest shareholder of company, we sincerely wish the management will be changed smoothly and help the company get on the track of sound progress as you do. Furthermore, we do hope that we could picture the future with you all, and I also ask for your support and concerning so that we could witness the rebirth of Range together.
Again, thank you for the efforts of all the directors and the management team, and thank you for the support and trust of all the shareholders.
Dated：28 November 2014
Explains an awful lot!