Concerned shareholders of Longreach Oil and Gas Limited seek board changes

TORONTO, Dec. 6, 2013 /CNW/ - Cam Deacon and Dennis Sharp (the "Concerned Shareholders"), in their capacities as shareholders of Longreach Oil and Gas Limited (TSX-V: LOI) ("Longreach" or the "Company") announced today that they are taking steps to reconstitute the management team and board of directors of Longreach (the "Board") in response to the concerns expressed by significant shareholders regarding the direction of the Company (collectively, the "Board Changes").

The Concerned Shareholders, who are also independent directors of the Company (Mr. Sharp holds the post of executive chairman), are seeking the removal of Andrew Benitz, Bryan Benitz and Ronald Lansdell as directors of Longreach as well as the removal of Andrew Benitz as the Company's Chief Executive Officer.

In their place, Gregory Boland, Benjamin Yi and Nicholas Brigstocke (the "New Nominees") have been nominated by the Concerned Shareholders to sit on the Board as independent directors for the remaining terms of the departing directors or until their successors are elected or appointed. The biographies and other pertinent information regarding the New Nominees are set out further below.

If the Board Changes are implemented, it is expected that Dennis Sharp will serve as interim Chief Executive Officer and that the reconstituted Board will be comprised of the New Nominees as well as current directors Dennis Sharp, Cam Deacon, Yogeshwar Sharma, Jonathan Morley-Kirk and Thomas Vukovich.  The Concerned Shareholders believe that if the Board Changes are implemented, the newly-constituted Board will collectively possess the depth of experience required to better position Longreach to achieve its full potential.  In addition, the newly constituted Board would be independent with interests closely aligned with those of shareholders.

Under the Company's governing law in Jersey (Channel Islands), the Board Changes can be effected by a simple written notice to Longreach from shareholders holding more than 50% of the issued and outstanding shares.  The Company's governing law also allows for the requisition of an extraordinary general meeting of shareholders by shareholders holding 10% or more of the issued and outstanding shares to determine the Board Changes.  The Concerned Shareholders have prepared and filed a form of notice and requisition on the Company's profile on SEDAR at www.sedar.com (reproduced in part at the end of this press release) and believe that they have the support of shareholders representing more than 50% of the issued and outstanding shares required to effect the Board Changes. If required, the Concerned Shareholders are prepared to requisition a meeting of shareholders to determine the Board Changes. Shareholders who wish to support the Concerned Shareholders are invited to contact Cam Deacon or Dennis Sharp by e-mail as set out below.

Information Concerning the New Nominees

Gregory Boland (Ontario, Canada) is the President and CEO of West Face Capital Inc., a Toronto-based investment manager that he founded in 2006.  Mr. Boland focuses on value and distressed investing and has been actively involved in the restructurings of a number of portfolio companies. From 1998 to 2006, Mr. Boland managed portfolios while at Enterprise Capital Management and was previously a Vice President and Partner in proprietary investments at RBC Dominion Securities. Mr. Boland holds a Bachelor of Commerce from the University of British Columbia.  He is a Leslie Wong Fellow with the UBC Portfolio Management Foundation.

Mr. Boland beneficially owns, or controls or directs, directly or indirectly, 8,571,453 shares of Longreach, representing approximately 10.57% of the issued and outstanding Longreach shares, which shares are held by funds managed by West Face Capital Inc.

Benjamin Yi (Ontario, Canada) is an investment professional with Goodman & Company, Investment Counsel Inc.  Prior to joining Goodman & Company in 2010, Mr. Yi co-founded and led the Product Analytics group at the manager of Dynamic Funds, where he focused on fund analysis and the development of closed end fund trading strategies beginning in 2006.  Prior thereto, Mr. Yi worked in a business development capacity at VenGrowth Capital Partners, a Toronto-based private equity and venture capital firm, after beginning his career at Fidelity Investments Canada.  Mr. Yi holds a Bachelor of Commerce degree from Trinity College and a Master of Finance degree from the Rotman School of Management at the University of Toronto.  He is a member of the Toronto CFA Society and became a CFA charter holder in 2008.

Mr. Yi does not beneficially own, or control or direct, directly or indirectly, any shares of Longreach.  Goodman & Company, Investment Counsel Inc. is the wholly owned investment counselling subsidiary of Dundee Corporation.  Dundee Corporation beneficially owns, or controls or directs, directly or indirectly, 12,291,146 shares of Longreach, representing approximately 15.15% of the issued and outstanding Longreach shares.

Nicholas Brigstocke (West Sussex, United Kingdom) is a corporate director with a distinguished international career in the investment sector, including tenure at the brokerage firm of de Zoete and Bevan, which was later acquired by Barclays. He was appointed Chairman of Barclays de Zoete Wedd's corporate broking business, which was acquired by Credit Suisse First Boston. Mr. Brigstocke served as Chairman of Credit Suisse First Boston UK equity capital markets until 2001, following which he acted as a Senior Consultant with Bridgewell Corporate Finance Ltd. until 2004.  Mr. Brigstock beneficially owns, or controls or directs, directly or indirectly, 65,000 shares of Longreach.

Additional Information Relating to Public Broadcasts

The information contained in this press release is provided in accordance with Canadian securities laws applicable to public broadcast solicitations.  To the extent required by applicable law, the Concerned Shareholders are relying on the exemption under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian Securities Administrators ("NI 51-102") to make this public broadcast.  The statements made in this press release are not made by or on behalf of Longreach or its management and, except as otherwise stated herein, are made by the Concerned Shareholders.  The Concerned Shareholders have retained Norton Rose Fulbright Canada LLP as legal advisors.

The Concerned Shareholders collectively own, or control or direct, directly or indirectly, 2,455,184 shares of Longreach, representing approximately 3.02% of the issued and outstanding Longreach shares.  The Concerned Shareholders will bear all costs and expenses associated with any solicitation of proxies, including in connection with any requisitioned meeting to determine the Board Changes (a "meeting"), however the Concerned Shareholders intend to seek reimbursement from the Company for expenses reasonably incurred in connection with any such requisition  and solicitation of proxies.

Any proxies solicited, including in connection with a meeting, may be solicited by or on behalf of the Concerned Shareholders, including by professional proxy solicitors which may be retained by the Concerned Shareholders from time to time, and such proxies may be solicited by way of public broadcast, including through press releases, speeches or publications, as well as by mail, telephone, e-mail or other electronic means or in person or by any manner permitted by law.  A proxy may be revoked by instrument in writing executed by a shareholder or by his attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.  If required by applicable law, any references herein to a solicitation of proxies includes the notice and requisition referred to herein.

Information relating to the number of shares beneficially owned, or controlled or directed (directly or indirectly) by the New Nominees, as well as information relating to the present principal occupation, business or employment of each New Nominee within the five preceding years, not being within the knowledge of the Concerned Shareholders, has been furnished to the Concerned Shareholders by the respective New Nominees and provided above under the heading "Information Concerning the New Nominees" together with the province or state and country of residence of each New Nominee.  To the knowledge of the Concerned Shareholders, none of the New Nominees have previously served as a director of Longreach.  Percentages reported herein based on the total number of issued and outstanding shares of Longreach have been calculated based on the Company's total number of issued and outstanding shares as disclosed by the Company.

To the knowledge of the Concerned Shareholders, except as noted below, no New Nominee is, at the date hereof, or has been, within 10 years before the date hereof: (a) a director, chief executive officer or chief financial officer of any company (including Longreach) that: (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was issued while the New Nominee was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was issued after the New Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) a director or executive officer of any company (including Longreach) that, while such New Nominee was acting in that capacity, or within a year of such New Nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) a bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such New Nominee.

On March 26, 2012, Azure Dynamics Corporation ("Azure") filed a voluntary petition in the Supreme Court of British Columbia for an Initial Order under the Companies' Creditors Arrangement Act (the "CCAA") seeking a stay of proceedings while Azure and its subsidiaries pursue restructuring alternatives under CCAA protection.  On that date Azure also filed a voluntary petition under Chapter 15 title 11 of the United States Bankruptcy Code to seek recognition and enforcement in the United States of the Initial Order requested in the CCAA proceedings.  Mr. Brigstocke was a director of Azure at the time of the Azure's CCAA filing.

To the knowledge of the Concerned Shareholders, no New Nominee has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation, or by a securities regulatory authority, or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a New Nominee.

None of the Concerned Shareholders or their respective associates and affiliates and, to the knowledge of the Concerned Shareholders, none of the New Nominees or their respective associates or affiliates, have any material interest, direct or indirect, in any transaction since the commencement of the Company's most recently completed financial year or in any proposed transaction which has materially affected or would materially affect the Company or its subsidiaries.

The registered address of Longreach is located at Queensway House, St Helier, Jersey (Channel Islands) JE1 1ES.  A copy of this press release may be obtained on the Company's SEDAR profile at www.sedar.com.

The following is a reproduction of the Notice and Requisition (excluding the execution page and schedule attached thereto) which has been filed by the Concerned Shareholders and is available on the SEDAR profile of Longreach at www.sedar.com.

NOTICE AND REQUISITION
     
TO:    LONGREACH OIL AND GAS LIMITED ("Longreach")
Queensway House
St Helier
Jersey, Channel Islands, JE1 1ES
     
AND TO:  THE BOARD OF DIRECTORS OF LONGREACH (the "Board")  
     
WHEREAS Longreach is a Jersey limited company governed by the Companies (Jersey) Law
1991 (the "Act") with a registered office located at Queensway House, St Helier, Jersey, Channel
Islands, JE1 1ES;
     
AND WHEREAS Longreach is a "reporting issuer" in certain Provinces of Canada under applicable
Canadian securities laws, with its principal regulator located in the Province of Alberta;
     
AND WHEREAS the undersigned acknowledge receipt of a press release disseminated on December
6, 2013 by Messrs. D. Campbell Deacon and Dennis Sharp, as shareholders of Longreach
(the "Concerned Shareholders"), made by public broadcast in the form attached hereto at
Schedule "A" (excluding the reproduction of this notice and requisition) (the "Press Release"),
which is incorporated by reference and forms part of this notice and requisition;
     
AND WHEREAS subsection 11(5) of the Articles of Association of Longreach (the "Articles")
provides that a director of Longreach shall cease to hold office if he is removed by notice to
Longreach in writing signed by the holders of more than half the issued shares of Longreach
and deposited at the registered office of Longreach situate in the Island of Jersey
(the "Removal Notice");
     
AND WHEREAS subsection 6(3) of the Articles provides that the directors must convene an
extraordinary general meeting on a requisition made in accordance with the Act (and any
statutory modification or re-enactment thereof for the time being in force) in writing and signed
by members holding in the aggregate not less than one-tenth of the total voting rights of the
members of Longreach who have the right to vote at the meeting (the "Requisition Notice");
     
NOW THEREFORE:
     
Removal Notice.  Provided the undersigned hold, in the aggregate, more than half the issued
shares of Longreach, section 2 below shall not apply and, instead, this section 1 shall apply and
thereupon notice is hereby given that:
     
  (a)  Mr. Andrew Benitz be and is hereby removed as a director of Longreach;
     
  (b)  Mr. Bryan Benitz be and is hereby removed as a director of Longreach; and
     
  (c)  Mr. Ronald Lansdell be and is hereby removed as a director of Longreach;
     
and the undersigned hereby consents to the appointment by the remaining directors of Longreach
pursuant to subsection 10(3) of the Articles those appointee directors set forth in the Press Release,
being Mr. Gregory Boland, Mr. Benjamin Yi and Mr. Nicholas Brigstocke, in each case to hold office
until the next annual general meeting of members of Longreach or until their successors are elected
or appointed.
     
Requisition Notice.  The undersigned, holding in the aggregate not less than one-tenth of the
total voting rights of the members of Longreach who have the right to vote, hereby requisitions the
Board to call an extraordinary general meeting of members for the transaction of the following business:
     
  (a)  to remove the following existing members of the Board: Mr. Andrew Benitz;
Mr. Bryan Benitz and Mr. Ronald Lansdell;
     
  (b)  provided (a) is passed, to elect three (3) new members of the Board as set
forth and described in the Press Release, being Mr. Gregory Boland;
Mr. Benjamin Yi and Mr. Nicholas Brigstocke, to hold office until the next
annual general meeting of the members of Longreach or until their successors
are elected or appointed; and
     
  (c)  the transaction of such other business as may properly come before the meeting.
     
THE UNDERSIGNED hereby confirms that, as of the effective date of this notice and requisition, it
holds that number of shares of Longreach as set out below its signing block and hereby authorises
and appoints as its attorney any one of the Concerned Shareholders or any partner from Ogier, the
Jersey law firm, on behalf the undersigned, to execute and deliver a further original copy of this notice
and requisition to the registered office of Longreach and such additional instruments, documents or
assurances or do such other acts or things as may be required to give effect to, and carry out the
intent of, this notice and requisition.  Further, the undersigned agrees to ratify and hold harmless
each attorney in respect of any lawful actions taken in the exercise of its authority hereunder.
     
THIS NOTICE AND REQUISITION shall be governed by the laws of Jersey and may be executed in
several counterparts by the undersigned, each of which when so executed shall be deemed to be
an original and all such counterparts together shall constitute one and the same instrument, effective
as of the date that this instrument is sent to Longreach by the Concerned Shareholders.  Delivery of
an executed counterpart of a signature page of this instrument by telecopy or other electronic
transmission (including portable document format) shall, to the extent permitted by law, be as
effective as delivery of a manually executed counterpart of this instrument.

(execution page and schedule omitted)

* * *

 

SOURCE Concerned shareholders of Longreach Oil and Gas Limited

For further information:

Cam Deacon    
cdeacon@deaconandco.com   

Dennis Sharp 
dsharp@csmgmt.ca