Connacher CEO resigns amid company revamp
Chris Bloomer resigns in wake of successful financial restructuring
Chris Bloomer, the CEO who led oilsands producer Connacher Oil and Gas Ltd. through a recent painful restructuring that allowed holders of $ 1 billion in debt to assume almost all of its equity, has resigned, the company announced Wednesday.
The restructuring was designed to save $ 80 million per year in debt- servicing costs and raise capital needed to fix chronic operational issues at Connacher’s two 10,000- barrel- per- day northern Alberta thermal oilsands projects. It included the issuance of $ 35 million of new convertible notes and a $ 30- million increase to its term loan.
“For me, it was basically mission accomplished and it’s better off in the new hands. They’ll have a tool box to work with,” said Bloomer in an interview with the Herald.
“It’s been a major success. All the other junior oilsands companies are basically defunct now, but Connacher is going forward.”
The news is the latest in a week of turmoil for junior Alberta oilsands producers — on Monday, insolvent Calgary- based Southern Pacific Resource Corp. was thrown into receivership and on Tuesday, Vancouver- based Ivanhoe Energy Inc. was declared bankrupt.
Southern Pacific, which is closing its money- losing STP- McKay oilsands project, is now in the hands of a receiver, while Ivanhoe trustee Ernst and Young said the company’s assets, including its proposed Tamarack oilsands project, would be put up for sale “in the near term.”
Meanwhile, Calgary- based private oilsands junior Laricina Energy Ltd. remains under Companies’ Creditors Arrangement Act protection from creditors after announcing in February it would shut down its Germain thermal commercial demonstration project and halt planning on its jointventure Saleski project.
Connacher’s restructuring required months of negotiations and was nearly derailed when Credit Suisse Group AG, representing first- lien lenders, threatened to force the immediate repayment of a $ 128- million loan, forcing Connacher to sweeten its offer.
In a news release Wednesday, the company said its interim chief executive will be investment manager Brent de Jong, founder of De Jong Capital, who is also Connacher’s new chairman. Its previous chairman, Colin Evans, died in April.
It said de Jong will lead the process to find a permanent CEO. He did not return a request for comment.
Connacher also announced it has appointed a new director, Doug Dreisinger, a chemical engineer and former president of energy marketing for Nexen Inc., who currently serves on the board of the Alberta Petroleum Marketing Commission.
Bloomer, a geoscientist, joined Connacher in March of 2013 from Petrobank Energy and Resources, becoming the first permanent CEO since the company suddenly parted ways with Dick Gusella in February 2012. Peter Sametz had filled in as interim CEO until the end of 2012.
On Wednesday, Connacher shares closed at $ 2.52, down six cents. The stock resumed trading under a new stock symbol on May 15 after the completion of the restructuring. They closed at $ 4.50 that day and have fallen steadily in very thin volume since then.
“While the financial structure has improved and the company is on a more solid footing going forward, the cost structure is still high and the equity valuation would need to be more attractively priced to improve the risk/ reward balance,” said Peters & Co. in a research note published May 15, rating the stock underperform with a 12- month target of $ 3.