Petroneft shareholders back management on farm-out

Shareholders in Irish exploration firm, Petroneft Resources, illustrated their support for the company’s management yesterday by overwhelmingly voting in favour of the firm’s recent farm-out agreement and unanimously opposing a hostile takeover approach from another investor.

Petroneft shareholders back management on farm-out

At the first of two consecutive EGMs in Dublin’s Herbert Park Hotel yesterday morning, shareholders voted — with a 99.6% to 0.4% majority — in favour of the €61.5m farm-out deal recently negotiated by the company’s management regarding one of its chief assets in Russia.

Earlier this month, Petroneft announced that it had reached agreement over the long-running search for a development partner at its high-potential Licence 61 asset in the Arbuzovskoye field in Tomsk.

Oil India is buying a 50% share in the licence for a total consideration of $85m, which includes an up-front payment of $35m.

Separately, 95% of Petroneft shareholders voted against the idea of Natlata — a British Virgin Islands-registered investment vehicle, which owns 14.7% share of the Dublin firm — taking a controlling stake in the business.

Petroneft had already urged shareholders to reject Natlata’s proposals, saying it was aiming to take control of the business without paying shareholders a fair price.

Petroneft’s chairman, David Golder, said yesterday marked “a very important day” for the company.

“The board has proposed a strategy for the next phase of the company’s development, which has been overwhelmingly supported by the shareholders.

“Of approximately 850 individual shareholders voting, more than 810 shareholders supported the board’s recommendations.

“This gives us a mandate to conclude the farm-out with Oil India and to progress the development of our asset, debt free and with a fully-funded $45m work programme,” he said.

Its updated results showed Petroneft — whose total assets are located in the Tomsk region of Russia — is fully funded for its two-year work programme.

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