Empire Oil & Gas is facing a board upheaval with its biggest shareholder and joint venture partner ERM Power calling a meeting of shareholders to consider removing Empire's executive chairman and two other directors.
Empire Oil & Gas is facing a board upheaval with its biggest shareholder and joint venture partner ERM Power calling a meeting of shareholders to consider removing Empire's executive chairman and two other directors.
Brisbane-based ERM said today that it would propose the removal of executive chairman Craig Marshall and fellow directors Neil Joyce and Jeffrey MacDonald, with Bevan Warris the only current Empire director to remain in place if shareholders vote in favour of the plan.
Under the proposal, ERM representatives Brett Heading and former Western Power managing director Tony Iannello will be appointed as directors and the board will appoint a new chief executive and two independent directors, one of whom will take over as chairman.
Mr Heading will resign as a director once the new chief executive and board are in place, leaving Mr Iannello as the sole ERM representative on the board.
Empire and ERM are joint venture partners in a number of projects, including the Red Gully gas and condensate processing facility near Gingin.
ERM holds a 23.6 per cent minority interest in the Red Gully project and is Empire's biggest shareholder, with a 10 per cent stake in the company.
ERM said that it had been patient with Empire's board but the directors had failed to deliver sufficient value for shareholders.
"ERM Power believes Red Gully and other Empire assets have significant underlying value which Empire's board has failed to realise for its shareholders and joint venture partners," ERM said in a statement.
"This is reflected in Empire's share price, which has fallen by more than 60 per cent from ~4 cents to ~1.5 cents since the Red Gully discovery in March 2011."
Empire last week revealed that it had been hit with a further 10.9 per cent blowout in the cost of building and commissioning the Red Gully plant.
The company said the total cost of the facility would be $38.7 million, up from its previous guidance of $34.9 million, released in April.
Before that, the company had estimated the project would cost $29.1 million.
Empire produces eight terajoules of natural gas each day at Red Gully, which is sold to alumina producer Alcoa, and 500 barrels of condensate per day, which are trucked to the BP refinery in Kwinana.
Empire was recently reported to have been entangled in legal action against critics of the company for what it describes as incorrect and defamatory commentary that has affected the company's share price.
ERM said it had no intention to make a takeover bid for Empire but instead intended to work with shareholders to ensure the value of the company's assets were reflected in its share price.
Empire shares were unchanged at 11:30AM WST at 1.6 cents.
