Dear Mr Chen and Mr Yiu,
We would like to welcome you and Ms Wang to Range Resources and hope that your time with Range will prove to be a successful period for you, the company and its shareholders.
Thank you for your letter of 24 December which has been well received by RIG’s representatives and which we hope heralds the establishment of a new framework of more consensual and open communications between Range’s Board of Directors and the private investors who are the predominant shareholders in the company.
We will publish the letter to our members simultaneously with this response and will provide their feedback in due course.
By way of introduction, Range Investor Group (RIG) is a collective of shareholders, set up in October 2013 in response to what many investors saw as being very poor operational and investor relations delivery by the company.
Our principal aim is to help improve the communications between Range Resources and its investors whilst also seeking to increase the interaction between shareholders and the company e.g. by increasing voting turnout for the company’s general meetings. From our inception, voter turn-out has increased four-fold and we will continue to campaign for private investors to exercise their rights as shareholders.
RIG comprises c.900 members with collective shareholdings of well over 1 billion shares (over 20% of the company’s shares in issue). Our membership is growing rapidly and has increased by over 150m shares in the past month alone as many private investors are seeking answers on the future of Range and see RIG as the appropriate conduit to convey shareholder concerns. Although RIG is largely made up of UK-resident shareholders, many members live elsewhere in the world and three of RIG’s ten representatives are based outside the UK.
With regard to your proposals for improving communications with shareholders, namely:
i) Meeting with RIG representatives in January,
ii) Regular monthly Q&A with RIG,
iii) Monthly operational and production updates,
in summary we are delighted with these steps which we have been encouraging for some time with previous management. We believe these proposals will improve transparency and allow shareholders to make informed decisions on their investment as well as ensuring that the company is focused on issues that are important to investors.
We will feedback on each of these in detail but would like to establish a point of principle that we are happy to act as a conduit in channelling questions put forward by our members but would prefer that responses are published to all shareholders, preferably in the form of regulatory announcements so that there is a level playing field for all investors.
There is little doubt that the period surrounding the recent Annual General Meeting has been one of the most turbulent times in Range’s history. Whilst we welcome the way the market has been updated during that period, given the significance of the news issued, our members and other shareholders have many questions at the present time and are understandably concerned about the movements in the company’s share price prior to suspension. We have summarised below the key issues as raised by our members and trust that you will wherever possible provide an update to shareholders, either through regulatory news channels or via the Range website or other corporate communications (e.g. investor call) as appropriate.
The most prominent current questions from our members are as follows:
1. Range’s shares were suspended on 12th December 2014. It has been suggested that this is linked to the appointment of replacement Australia-based Non-Executive Directors. Please could you confirm if this is the primary reason for suspension and how long you envisage this suspension is likely to continue?
2. Most shareholders have expressed some degree of concern at the possible links between Abraham Ltd, Core Capital Management and LandOcean, particularly given the established connection between Abraham and LandOcean through Ms Wang’s Non-Executive Director nomination and past directorships and that all three organisations are China / Hong Kong based. Please can the relationships between these three organisations be clarified?
3. Further to question 2, there is understandable concern among shareholders about the company being bought ‘on the cheap’, first through the Abraham investment earlier this year and now the proposed Core deal at an even lower price, neither of which would have been likely to have been achievable on the open market. Private Investors therefore would like to see a guarantee from Abraham / Core that there will be no takeover below a price that is several multiples of the existing share price.
4. It was reported that at the end of the 28th November 2014 AGM, an Abraham representative attempted to read out a letter explaining the reasons for the proxy voting that removed four of the directors, but was prevented from doing so by officials in Perth. A copy of what was purported to be this letter was widely circulated on the internet over the following weekend and subsequently sent to RIG. Please could you arrange for this letter to be released via RNA or uploaded onto the Range website to add substance to reports of its legitimacy.
5. Please advise when an updated Field development Plan (FDP) will be published?
6. How does the company plan to increase production in Trinidad with the same equipment that has failed Range in the past? Or are there proposals for new / contracted-in rigs?
7. Please confirm how each set of funding streams proposed in the 12th December announcement will be used moving forward, if approved. Please also confirm the company’s plans for either servicing or removing the Lind debt, disclosing any restrictive terms.
8. Please could you confirm at least some General Meetings will be held in London or held jointly as we feel this was a successful format for the AGM despite being overtaken by events.
9. It was announced last week that the Texas assets have been sold to Citation Resources for little over $1m. Please explain how the value of the Texas assets could be impaired so greatly from previous carrying values and how this deal represents good value for Range’s shareholders. Please advise of the current status of the long-proposed sale of non-core assets in the Republic of Georgia.
10. Please could a full operations / production report be provided by the first week in January 2015 to include the current status and activity of each drilling rig in Trinidad as well as a report of historic 2014 operations (as shareholders do not believe these have been adequately explained e.g. the status of 5 wells reported as completed in 2014)?
There are also a large number of other questions which remain unanswered, many of which were raised in recent letters to Rory Scott Russell, others which would have been aired at the recent AGM had it not been so unexpectedly cut short, plus further unanswered questions dating back to the previous regime which we hope in due course can be satisfactorily addressed to achieve closure. We will look to raise these matters with you in future when appropriate.
Thank you for your pre-emptive introductory letter to RIG and for your time in reading our letter and questions – we look forward to a published response in the near future – and we welcome the new directors once again to our company. We hope the relationship will be a successful one for all stakeholders.
Yours sincerely,
On Behalf of Range Investor Group
Statistics: Posted by Scotland Resources — Mon Dec 29, 2014 12:25 pm