COSTLY, TIME CONSUMING AND DISTRACTING PROXY FIGHT.

Obsidian stock jumped nearly 14.5 per cent on Wednesday to close at $1.34 on the Toronto Stock Exchange.

The composition of Obsidian’s board has been changing since former chairman and Calgary oilpatch veteran Rick George died of leukemia last August.

George was chairman through a difficult period as the company disclosed that a previous management team was mis-categorizing expenses, leading to a shareprice collapse even before oil prices began to slide in late 2014. The company changed its name from Penn West Petroleum to Obsidian to distance itself from the scandal, which it finally settled in an $8.5-million deal with the U.S. Securities and Exchange Commission last year.

Like other Calgary-based mid-tier oil producers, Obsidian has been under extreme pressure to cut costs, reduce debt, streamline its operations and halt a slide in its share price in recent years. It has also struggled to remain in compliance with New York Stock Exchange listing requirements.

In an added twist, George is the father of FrontFour portfolio manager Zachary George, who co-authored a letter to Obsidian shareholders Monday criticizing the company’s current strategy.

“The time for change at Obsidian has come,” FrontFour’s George, Loukas and David Lorher wrote in a letter to the company the next day.

Apart from Loukas, FrontFour is nominating former Chevron executive Steven Evans, former ConocoPhillips executive Michael Faust and coal-miner Cline Mining Corp.’s acting CEO Matt Goldfarb to the Obsidian board.

FrontFour’s letter to shareholders says its nominees would “help drive the necessary decisions” to overhaul the company’s assets, focus on one key light oil formation and boost its share price.

The hedge fund wants Obsidian to sell its older natural gas assets and its operations in two Alberta oil and gas formations to focus solely on its properties in the Cardium light-oil formation.

“It is our strong belief that our plan would result in a value proposition for investors that would be valued significantly higher by the public equity markets and would quickly result in Obsidian being back in compliance with (New York Stock Exchange) listing standards,” the letter stated.

The company itself acknowledged the need for change in its release, but said FrontFour’s proxy fight is “risking the company’s progress.”

“We recognize that status quo is not an option and have been pursuing attractive commercial opportunities to reward investors,” Thornton said. He did not indicate what those opportunities were. money said.

BMO Capital analyst Alex Terentiew said while there are a “lot of unknowns,” preliminary assessment suggests the company’s operating costs in the country could rise by as much as eight per cent. “A hard push by the government could risk future investment,” Terentiew told clients in a note, but added that the risk of a significant “cash grab” by the government was low. Concerns about revenue from mining have arisen in other African countries, including the Democratic Republic of Congo, where mining companies executives are travelling this week to discuss the implementation and impact of a tax hike and higher royalties, according to a Reuters report. for Zambians,” he