Post by RIG Admin on Aug 17, 2015 9:51:16 GMT
Dear RIG members,
Please find attached a letter sent today to David Chen.
Thank you for the feedback and holdings updates over the past few weeks. After a brief summer hiatus during which we have cautiously monitored developments with Range we will be more active in engaging with the company over the coming months as we expect operational and corporate activity to ramp up.
Please ensure that you exercise your right to vote at the upcoming EGM on 28th August - please find attached a Broker-by-Broker guide to how to register your vote. You will generally, depending on your broker, need to do this by the end of this week but ASAP if your voting is paper-based.
For non-RIG members the full unformatted text of the letter is shown below.
Best regards,
The RIG Representatives
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David Chen,
10 Adams Street,
The Strand,
London,
WC2N 6AA
17 August 2015
cc: Evgenia Bezruchko (Investor Relations, Range Resources)
Dear Mr Chen,
Following Range Resources’ resumption of trading on the 8th June 2015, RIG wanted to give the new board every chance to proceed with the ambitious plans detailed in the Chairman’s open letter to shareholders of 18th May. However over the summer months, as a result of the lack of news on tangible operational or corporate progress, allied to a diminishing share price, our members’ cautious optimism had been replaced with considerable concern.
We therefore welcome the publishing of the investor Q&A on 12th August 2015 which we perceive to be both open and generally comprehensive. Therefore this letter will not seek to re-tread the same topics but focus more on RIG’s remit of trying to improve bilateral communications between the company and its investors.
Range’s new board will be well aware of investor frustrations at previous management’s tendency to over-promise and under-deliver. We are therefore disappointed that there have been several instances in recent regulatory announcements whereby it could be perceived that investors have been misled:
1. New Drilling Rigs
The regulatory announcement of 19th March 2015, stated that rig A with a drilling capability of 4,900 feet was “Currently on route to Trinidad and scheduled to commence drilling from August 2015.”
We now know that this rig was not on route and would like to understand from the company why it reports future events in the past tense.
2. Canari North
The regulatory announcement of 21st May 2015 stated an anticipated spud date for Canari North of early June (just two weeks from the announcement).
A further regulatory announcement on 1st June 2015 then stated that Range had “received all necessary approvals to proceed with the first three wells in the programme QUN 158, MD 249 and Canari North wells)”.
It would therefore be reasonable for investors to interpret that “all” approvals means exactly what it says - especially as QUN 158 had been drilled at that time as stated in the same regulatory announcement. The 14th July 2015 regulatory announcement then informs investors of delays as a result of the contractor not putting forward a fit for purpose rig but then states that there will be further “formal approvals to commence drilling operations”.
RIG members are disappointed that all the regulatory approvals stated on 1st June 2015 were not in fact in place.
We raise these examples not to rake over the coals but to demonstrate how poor and misleading communications can erode the relationship between the company and its investors and damage both Range’s and LandOcean’s fledgling reputation for operational competence. The Alternative Investment Market is all about perception, momentum and sentiment - we urge the board to be more aware of this when issuing regulatory announcements
We encourage the company to focus communications on what has actually happened, not what they perceive will happen and to be careful in setting investors’ expectations appropriately. One way to do this would be to commit to more regular operational updates so as to combat an historically-justified perception of “no news is bad news”. The preference of RIG’s members has always been for the company to commit to regular monthly reports in a standardised format disclosing both production and operational status on a well-by-well basis – this way there is more clarity of understanding, less scope for ambiguity and less uncertainty for shareholders.
We note in the recent Q&A that you do not favour this approach but perceive that operational updates will become more regular. We would like the company to commit that operational updates will always contain a contemporary update on production, an update on all development and exploration wells and that they will never be more than 6 weeks apart.
As stated earlier in this letter, RIG’s members feel frustrated that the board were unable to capitalise on early momentum when we resumed trading in June. We would like confirmation of what the board will be doing to support and increase the share price, specifically, when and if the SIBO funding is approved later this month.
The regulatory announcement of 18th May 2015 ends with a quote from Napoleon Bonaparte, “Victory belongs to the most persevering”. Range Resources shareholders have certainly endured to the extreme over the last few months and years and expected this valedictory statement to not herald a further period of perseverance. We now need the board to show us that our faith has not been misplaced.
Yours sincerely,
On behalf of Range Investor Group
RIG letter to David Chen 17 08 15.pdf (353.91 KB)
How to vote - Broker-by-Broker 5.0.pdf (399.27 KB)