The founder and manager of Raper Capital holds 1.5% of the company, buying in at around 51c after Sydney's Samuel Terry Asset Management made its 45c per share takeover offer this year, seeing an undervalued company with cash in the bank, assets that could be sold and oil price payments that coud be expedited.
Speaking to Energy News from hotel quarantine in Japan Raper said he sees a company that could return up to $1.80 per share once liquidated. He also outlined this on Twitter and in more detail in yesterday's furious letter.
He wants to get rid of the board and cancel any spend on further exploration. He is also aghast at the A$500,0000 per year rent paid by the Melbourne company for its prime Collins Street address.
His plan is simple: make sure there is shareholder support of at least 25% to vote against the board's remuneration package, meaning under the two strike rule he can move against the board and then drive a spill. Then, appoint a new team to wind the company up and return cash to shareholders.
He said angry shareholders forcing change were called "a growing band of barbarians" by one.
Last year over 75% of shareholders voted against the board's remuneration. Later all but long time managing director Cath Norman left, being replaced by two non-executive directors.
The day before the June annual general meeting one executive director resigned, with no word as to why from the company, though it is understood it came after major shareholder pressure.
At the FAR June AGM shareholders voted on a 100-for-1 share consolidation and for the subsequent 80cps return of cash. That worked out at $80 million, a fraction of what the company had recently raised from the market for work offshore Senegal.
It was forced to sell its 13.65% stake in the Sangomar oil project to Woodside after being unable to meet cash calls for a price Raper calls "cents on the dollar".
It took US$45 million, plus back costs and will receive a payment of up to $55 million, contingent on oil prices, from next year when the project starts up.
It missed cash calls after the pandemic thwarted its loans from a basket of banks; however some argued that had FAR not begun then finally lost an arbitration case with Woodside over its buy of the ConocoPhillips' stake in 2016, lending could have been wrapped up a year before COVID-19 and oil prices made loans unviable.
Raper suggests FAR's plan of more drilling offshore Gambia, released yesterday and based on its learnings from its unsuccessful wildcat of December, is fanciful.
"There is a good chance the board would have been spilled anyway. (But) that level of cash return should be illegal," he told Energy News.
"It's totally insulting."
"[Norman] may have overplayed her hand a little bit... I believe I have the resources to either kick her out or for a very close one. I want to preserve value for shareholders."
"I'm not sure what Ms Norman can do to thwart us. She's got to make her case at the meeting and I'll be making mine."
"I think Ms Norman's days are numbered. I've taken on tougher and won."
Raper is referring to a 2021 proejct where he talked shareholders in European company Hunter Douglas into refusuing a €62 per share bid. Eventually 3G Capital made a €175 per share bid.
He used his blog via his firm Raper Capital to argue agaisnt the deal. He also has a subscription-only news service with a four figure price tag.
FAR has been subject to three takeover offers in the last 12 months, one from Russia's Lukoil for 2.1c per share (when shares had been suspended at 1.1c) then a little known offer from Jersey-headquartered Remus Capital for 2.2c.
Both were pulled. The STAM offer was the third opportunistic move. The board has rejected it.
This, however, is the first genuinely open and antagonistic move against the company.
Shareholder Allan Gray sold down its stake inch by inch through 2021 and its fund manager Simon Mahwhinney spent plenty of time criticising management, but never tried to open roll the board.
It drilled a $50 million well, Bambo-1, last year. With an unexpected sidetrack cost of $10 million that left FAR with over $30 million in costs. It shares the project with Petronas in an equal split.
Unlike large shareholder Meridian Capital, which holds 19.28% of the company, Raper does not want to wait on the oil payments but rather negotiate an immediate, lower payment from Woodside, and then see if Petronas would like FAR's share of the Gambian project.
Not mentioned by the former Goldman Sachs man who graduated Sydney Grammar school in 2002 was that Petronas' appetite for all the projects might be a good indicator of whether they share FAR's view over its ultimate prospectivity.
Shares are down 2.8% to 67.5c each, but have climbed since STAM's 45c offer of last month.
