I think a proxy battle is the better option: it might get ugly, but at lease the shareholders get to vote instead of being subject to some back room deal.
This is really a chance for River Road or Lone Star to step up and take control.
Also, this will bring more attention to Miller as a stock and, on average, activism does create value, so you will get some new buyers.
I was glad that they reduced the board but would have liked to have seen someone from alaska added since Miller is 95% cook inlet energy. This board has had it share of rumors and dirt but without any substantiation. I run my business on fact and not rumor. This still is a great company with great employees working to bring more production on line. Say what you want about Tennessee horizontal but the extreme cost reduction in drilling caught my attention and this could be useful for joint ventures with others such as magnum Hunter who have Tennessee acreage.
Sentiment: Strong Buy
The devil went down to Knoxville
He was lookin' for a company to steal
He was feelin' mean, and hopin' to find
A soul he could trade for a deal.l
If SB doesn't already have a list of potential prospects (CV, HilCorp, etc) ...there are plenty of Investment Houses that do...GS, MS, BAC....on and on! Otherwise get ready for years in an investment swamp!
Truth be told, I have extreme respect for Mr. Panick. I run a business and can tell you that the unexpected can and does happen which delays projects. Something breaks, you don't have the part, must order it, find out it is back ordered, when it does ship then there is a weather delay, or the package arrives damaged. Stuff happens and it does not mean bad leadership. I don't know any Miller employee or board member and fully disclose that. I do not give blanket support and did not like the comp plan (and appreciate management responding to shareholder ire and dropping the options), wish they would sell that old plane, and wish they would stop issuing warrants and options like candy. I pay real money for my shares and would like for others to do the same.
Sentiment: Strong Buy
I was also skeptical of the crowd but appreciated the Times he interjected explanations into the answers of another. For example, when they were talking about lifting costs, he mentioned that it was per barrel of fluid, oil and water. Consequently, I thought he did a good job in his debut on a conference call.
Sentiment: Strong Buy
I believe negotiations are going to remain at an impasse and that there indeed will be dueling proxies.
Break out the banjos. The board is controlled by them who do not wish to leave.
It has been known for some time that the effective date of NF closing was prior to the end of the fiscal year. This was true for the last couple of presentations on their web site that show the 6K boepd target including NF. As I recall, the target slipped to include NF when Sword got delayed and RU9 was initially delayed for the disposal well. You are correct in saying that the target slipped to include NF. However this is not "news". This happened months ago. The reiterated the 6K boepd target (including NF) on the call.
Well, s happens, but that's why you don't give targets in terms of time and production. If you have mature properties maybe you can give guidance in a range, something like that, but promising X amount of daily production by Y date is just . . . stupid.
To defend them just a wee bit, sword took three times as long and cost three times as much as anticipated. Had it been on time, WM8, and another well would have been complete by now and we would have had three wells for the price of sword.
Miller may and should overcome this but other companies are looking a whole lot better and with less risk the Miller plus no management hassles. I still have some exposure here, but have shifted to USEG where the wells are paying out in 60 days. Will look at Tag oil
Tag Oil did issue shares at a higher level awhile back, but have been buying some back on the open market lately. They have 60 mil in cash and no debt. They should have plenty of cash flow from the shallow wells at Cheal to finance other projects without issuing common, preferred or debt. I have them trading at an enterprise value of about 2.5X forward cash flow. Great infrastructure and drilling inventory.
But ... They said they would have reached it a bit late without NF. Will probably make it now with NF and will be beyond 6000 when the late wells come in along with dual zone sword.
That's something like 7200 BOE. Some gas now so not as much income. Still good by summer.
I think you left out Mill-pd. Pref stock was around 110 mil (haven't updated my numbers from the last report). I think the WMRU wells are what's picking up the slack and hopefully some good results from RU9 and the subsequent offshore wells in 2014.
I think Mill looks ok. BPZ has been on a huge run (posted a heads up here when they hit that huge well at Alabacore). PTAXF looks insanely cheap. I am becoming a big fan of the New Zealand microcap plays (Tag Oil and East West Petroleum).
I don't disagree with you on Sword, although I think they will end up with a decent return on it with the tax credits. Subsequent wells should be cheaper. The WMRU wells look good. If memory serves me those are costing under 15 mil each currently, with expected production around 500 boepd and drilling times of 2 months. Those are nice wells WMRU may be the major driver of production growth in 2014.
Perhaps after RU9, they will drill a few more cheap, quick, high return wells closer to the platform.
I am shocked. SHOCKED!
Lone star put some good money up for it's activist position. Now they are losing money.
Maybe they will be a true activist fund and lead the charge for changes that are beneficial to all shareholders.
Maybe they will lead the third party to victory!