Questions Raised About Potential Management Turmoil As Arcan Director Abruptly Resigns

Questions Raised About Potential Management Turmoil As Arcan Director Abruptly Resigns

By: Tomas Ronolski - AllPennyStocks.com News

Monday, March 9, 2015

Although oil prices rebounded sharply last month, the outlook for the oil & gas industry remains gloomy. In fact, just last week, Rex Tillerson, CEO of the world’s largest listed energy company, Exxon Mobil Corporation (NYSE:XOM), said that oil prices will remain low for quite a while. Tillerson noted that the U.S. shale production, the chief reason for the supply glut in the global oil market, has been more resilient than expectations. As a result, prices will remain weak. Exxon itself has prepared itself for a low price environment by slashing its capital spending by 12% for 2015. And Exxon is not the only company that has announced production cuts. Many shale oil & gas producers have announced a cut to their capital spending this year in order to adjust to the new price environment.


The crash in oil prices and subsequently oil stocks has also increased the likelihood of M&A activity in the sector. While the short-to medium-term outlook for oil prices remains weak, longer-term prices will see a rebound due to robust demand from countries such as China and India. The key though will be to survive during the period of low price environment, and consolidation would be one way to do so.

One Bakken shale oil player, Whiting Petroleum Corp. (NYSE:WLL) has appointed bankers to seek potential buyers. It is likely that many other shale producers will look at a potential sale in the future.

The pressure has also been felt by Canadian oil & gas companies such as Arcan Resources Ltd. (TSX-Venture:ARN). Based in Calgary, ARN is engaged in the exploration, development and production of petroleum and natural gas in Western Canada.

In the past six months, ARN shares have fallen almost 75% as oil prices have tumbled. Over the weekend, ARN announced that one of its director, Murray Hinz resigned from his post. The company did not provide any details on why Hinz resigned from his post.

The announcement comes shortly after ARN announced that it appointed Lorie Waisberg and Henry Cohen to its Board of Directors. Waisberg has also been made the Chairman of the Board of Directors.

Interestingly, when the company announced the appointment of Waisberg and Cohen, it mentioned that its existing directors, which included Hinz, will continue. However, a little over a week after the announcement, Hinz has tendered his resignation.

Hinz though is not the only director to have resigned recently. Michael Laffin and Robert Dales also tendered their resignation recently. One can only wonder what is going on at the executive level at Arcan.

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