Explorer Oil Basins says ex-CEO’s litigation is ‘likely to fail’
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Tiny explorer Oil Basins says claims against it by former chief executive Neil Doyle are “very likely to fail”.
Victoria-focused Oil Basins (ASX:OBL) sacked Mr Doyle and its chairman Kim McGrath from their management positions in May last year, and four months later shareholders voted them off the board.
Both men have launched claims for unpaid salaries and director fees against the company.
Oil Basins said in its defence against the claim from Mr McGrath that he had not acted in the interests of the company, failed his fiduciary duties, used his influence to improve his position and was responsible for losses.
Mr Doyle filed a statement of claim last week asking for $519,655.45.
But he signed a Deed of Settlement and Release in December last year, agreeing to a $20,000 payment, superannuation of $3800 and five million Oil Basins shares, then worth about $2 million.
The company says its lawyer’s advice is that this claim is “very likely to fail” because of the fact that Mr Doyle signed the deed.
Mr Doyle claims it wasn’t binding.
Mr McGrath filed a suit in May this year, asking for $551,632.19 in unpaid salary, director’s fees, superannuation and expenses.
Mr McGrath and Mr Doyle were together paid a total package of $821,724 in 2015 — or about how much the company is worth in total today.
Company secretary Carl Dumbrell alleges the 2015 remuneration report failed because shareholders were so angry.
There were 218 million proxy votes in favour and 169 million against.
But at this AGM all of the motions, including the remuneration report, were passed by a show of hands.
“What annoys me about the contract is that it was written by Kim and signed by Neil, and Neil wrote his and it was signed by Kim,” Mr Dumbrell told Stockhead.
“The shareholders wanted change, they asked for change and they were ignored.”
He says they’ve paid Mr McGrath $200,000 as part of his salary claim.
A ‘lifestyle company’
Mr Dumbrell says Oil Basins is now a turnaround story.
Oil Basins has oil and gas exploration licences for offshore Gippsland in Victoria, and onshore Canning Basin and offshore Carnarvon Basin in Western Australia.
Mr Dumbrell says they’re raising $1.5 million, which should close in about a week, and are readying the Gippsland data to show off to bigger companies that may want a piece of it.
That field may hold up to 1.8 trillion cubic feet of gas – or three times that of ExxonMobil’s neighbouring Kipper Tuna Turrum field.
He says in 10 years the prior board focused only on an inaccessible project in the Canning Basin, called Derby.
“To get into our project in there, there’s no sealed roads,” he said. It has since been passed on to a former joint venture partner.
In its annual report the new board scathingly noted they had “changed the culture of the company from a “lifestyle company” to a company focused on development of its resources for the benefit of all shareholders”.
“The change has been difficult; management has held many meetings with industry and government stakeholders whom have expressed their concerns with the behaviour of the company under previous management.”
It lost a native title case with the Kinderley-based Nyikina Mangala in July, and must pay costs of $161,248 plus accrued interest.
In June it was forced to almost give away its 50 per cent share of the Canning Basin Derby block to joint venture partner Rey Resources, in exchange for Rey dropping almost $600,000 in claims against the company.
It made a $1.5 million loss in fiscal 2017, on cash outflows of $762,000.
It says it’s cut staff, including executive employees on higher salaries, changed suppliers , sold assets, and has started paying directors in equity rather than cash.
Oil Basins shares were at 0.3c in morning trade.