At Great Artesian’s annual general meeting yesterday morning, shareholders voted in a new chairman and director who both supported Shaw’s continuation as managing director into 2007.
The replacement of the Great Artesian board at the AGM was an unusual outcome in which smaller shareholders combined to defeat the largest shareholder in the company, Beach Petroleum (holder of 19.9%).
"Small shareholders felt Beach was attempting to go beyond the level of control that it was entitled to," a source told PetroleumNews.net.
The pro-Beach board resigned ahead of the AGM when it realised proxies were heavily against it being re-elected.
Newly appointed chairman Peter Hopkins, a resources lawyer, said he and Robert Pullan, a chartered accountant, would immediately start discussions with Shaw over the latter’s reappointment.
“We will progress the excellent exploration and development program that Dr Shaw has put in place," Hopkins said.
“Since founding Great Artesian, Dr Shaw has led a successful program, with six of the seven wells drilled on the company’s areas last year being discoveries.
"He has coordinated the start up of oil and gas production, and pioneered the first third-party gas sale agreement with the Moomba consortium. He has arranged more than $47 million of farmout agreements, making Great Artesian one of the most active petroleum exploration companies in Australia, leading to it being chosen for the Best Explorer award for 2006."
In addition, Hopkins invited Beach to appoint to the board a representative “who is acceptable to Great Artesian”.
“We will do everything that we can to work harmoniously with Beach Petroleum as a significant shareholder and a partner in exploration and production,” he said.
Prior to the AGM, Great Artesian issued a statement announcing that each member of the board – chairman John Butler and non-executive directors Douglas Schwebel, Roseanne Healy and Michael Frost – had resigned and had withdrawn their offer to be re-elected by shareholders today. Last week, Frost also stood down as a director on Beach’s board.
The move ensured the board did not have to answer questions about Beach’s intentions regarding its stake in Great Artesian and the termination of Shaw’s employment last week.
Not long after advising the market of the board’s resignation, Great Artesian shares entered a trading halt on the Australian Stock Exchange pending an announcement.
In addition, the company issued a response to a letter written to investors by one its top 20 shareholders, Jetan.
Butler said that letter contained a “number of inaccuracies”, namely that Jetan suggested Beach would appoint another suitably qualified person to replace Shaw if it decided not to renew his employment contract.
“That is clearly untrue and is obviously so by reference to the company’s ASX release dated November 21,” he said.
“What was stated was that if Dr Shaw’s termination date was not extended beyond December 31 – which is now the case – the company would appoint a suitably qualified person to fill the role of managing director.
“It would not necessarily be ‘another person’.” It would not necessarily “replace him’,” he added.
Earlier this week, Great Artesian announced that Beach had confirmed it would not renew Shaw’s contract after December 31, following an agreement made as part of the $14.5 million June share sale.
But Beach continues to deny it is gearing up for a takeover.
In a statement earlier this week, managing director Reg Nelson recognised the speculation, but said “at present we will continue to treat our investment as a strategic investment”.