SilverBow Resources Successfully Executing Strategic Priorities to Drive Shareholder Value
Files Investor Presentation and Sends Letter to Shareholders Highlighting
Board Urges Shareholders to Vote “FOR” ALL of SilverBow’s Highly Qualified Directors on the WHITE Proxy Card
Highlights include:
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SilverBow Has a Strong
Track Record ofOutperformance : Since 2021, our total shareholder return is 503%, compared to 193% for the XOP E&P Index.1 - Management Is Successfully Executing its Proven Strategy: We are generating strong operating results and recently set quarterly records for free cash flow and adjusted EBITDA.2 We expect this momentum to continue; and
- The Board Is Acting in Shareholders’ Best Interests: Our Board is composed of independent directors that bring direct industry expertise and public company board and executive leadership experience.
The full text of the letter follows:
Dear Fellow Shareholders,
SilverBow Resources’ Board and management team remain laser-focused on positioning the business to continue driving value for ALL shareholders. Our stock has significantly outperformed the XOP Index over the last several years.
On the other hand,
Shareholders should note:
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SilverBow Has a Strong
Track Record ofOutperformance : Since 2021, our total shareholder return is 503%, compared to 193% for the XOP E&P Index. 1 - Management Is Successfully Executing its Proven Strategy: We are generating strong operating results and recently set quarterly records for free cash flow and adjusted EBITDA.2 We expect this momentum to continue.
- The Board Is Acting in Shareholders’ Best Interests: Our Board is composed of independent directors that bring direct industry expertise and public company board and executive leadership experience.
To protect the value of your investment, using the WHITE proxy card, please vote “FOR” all SilverBow director nominees:
You can learn more about the quality of our Board, positive governance changes and SilverBow’s value creation opportunity at www.futureofsilverbow.com.
Additional information that outlines our strategy can be found in the investor presentation SilverBow recently published at www.futureofsilverbow.com/investor-presentation.
SilverBow’s Proven Strategy Is Delivering Results
Our Board has been overseeing a clear and proven strategy to drive shareholder value by:
- Building a scaled and durable portfolio characterized by a deep inventory of drilling opportunities and commodity diversity;
- Driving efficiencies and enhancing margins to capture sustainable capital efficiencies and greater margins;
- Delivering profitable growth through continued execution of our returns-focused strategy; and
- Strengthening the balance sheet and deepening liquidity, with strong free cash flow generation.
The results of this strategy:
- Secured decade+ of high-quality drilling inventory with about 1,000 locations across our 220,000 net acres;
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Executed a transformative
South Texas acquisition in late 2023 that enhanced scale and added important capital allocation flexibility; - Achieved peer-leading cost structure (opex 40%+ lower than peer average and cash G&A 65%+ lower than peer average) and best-in-class margin profile (EBITDA margin 20%+ higher than peer average);
- Posted 21% average ROCE (2021-23);
- Generated four consecutive years of free cash flow through ongoing capital discipline;
- Improved our capital structure through a lower debt, higher liquidity focus; and
- Optimized 2024 plan to maximize free cash flow and fund high-return oil and liquids developments.
Our success is being recognized by the market.The Company has outpaced the XOP E&P index since 2021, delivering total shareholder returns of 503% compared to 193% for the XOP E&P Index, as well as outsized returns over one-, three- and five-year periods.1,3
SilverBow’s Highly Qualified Directors Are Also Further Enhancing Our Governance
A strong Board and robust governance practices are critical to sustained value creation. Our legacy existing governance structure was adopted in the aftermath of our 2016 financial restructuring. As our original ownership has changed, our Board is evolving SilverBow’s governance to better align with best practices.
After discussions with our current shareholders, we are proposing significant governance changes at the upcoming 2024 Annual Meeting:
- Declassifying the Board and providing for the annual election of all directors;
- Adopting a majority voting standard in uncontested elections of directors; and
- Eliminating the supermajority vote requirements for shareholders to amend certain provisions of our certificate of incorporation.
We have also continued to strengthen our Board with new skill sets, collective experiences and enhanced diversity.
We have a highly engaged, experienced Board that is working to maximize value. Since 2023, SilverBow has added four highly qualified new independent directors, which we believe gives us the right balance of valuable company knowledge and fresh perspectives in the boardroom. Each director has extensive experience in the energy sector, including Leland T. “Lee” Jourdan, the Board’s most recent addition.
Our three independent directors
Our Directors Are Independent, Highly Qualified and Not Conflicted |
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In contrast to Kimmeridge’s highly conflicted nominees
Kimmeridge’s Proxy Fight Is About Forcing a Value-Destructive Combination With
We have put out extensive information about our two-year engagement with Kimmeridge. This includes reaching a deal on agreed terms, which Kimmeridge ultimately reneged on because they were unable to secure financing. Most recently, Kimmeridge presented a value-destructive proposal to merge KTG with SilverBow which undervalued SilverBow while substantially overvaluing its own KTG assets. The SilverBow Board previously rejected the proposal, determining that it was NOT in the best interests of SilverBow shareholders. SilverBow published our analysis of the proposal in our
Although Kimmeridge withdrew its proposal, we believe they are pursuing a proxy contest in an attempt to gain control of SilverBow and ultimately force this value-destructive transaction upon our shareholders.
We strongly believe appointing Kimmeridge’s nominees to the Board would jeopardize SilverBow’s proven strategy and business plan and ultimately diminish shareholder value. Kimmeridge’s three nominees –
VOTE THE WHITE PROXY CARD AND “FOR” SILVERBOW’S HIGHLY QUALIFIED, INDEPENDENT DIRECTOR NOMINEES
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Gabriel L. Ellisor ; -
Kathleen McAllister ; and -
Charles W. Wampler
Thank you for your investment in SilverBow.
Sincerely,
The SilverBow Board of Directors
If you have any questions or require any assistance with voting your shares, please call SilverBow’s proxy solicitor:
Shareholders: (877) 825-8793 (toll-free from the
Banks and brokers may call collect: (212) 750-5833 |
Vote “FOR” All of SilverBow’s Highly Qualified Directors Today on the WHITE Proxy Card
Your Vote Is Important!
Please vote on the WHITE proxy card “FOR” the Company’s three nominees, “WITHHOLD” on Kimmeridge’s nominees, and “FOR” ALL other Company proposals using one of the following options:
Remember, please discard and do not sign any gold Kimmeridge proxy card. If you have already voted using a gold proxy card, you may cancel that vote simply by voting again using the Company’s WHITE proxy card. Only your latest-dated vote will count!
If you have any questions about how to vote your shares, please call the firm assisting us with the solicitation of proxies:
INNISFREE M&A INCORPORATED Shareholders may call:
1 (877) 825-8793 (toll-free from the +1 (412) 232-3651 (from other countries) |
ABOUT
FORWARD-LOOKING STATEMENTS
This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management’s expectations or beliefs concerning future events, and it is possible that the results described in this communication will not be achieved. These forward-looking statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this communication, including those regarding our strategy, the benefits of the acquisitions, future operations, guidance and outlook, financial position, prospects, plans and objectives of management are forward-looking statements. When used in this communication, words such as “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “budgeted,” “guidance,” “expect,” “may,” “continue,” “potential,” “plan,” “project,” “positioned,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following risks and uncertainties: further actions by the members of the
All forward-looking statements speak only as of the date of this communication. You should not place undue reliance on these forward-looking statements. The Company’s capital budget, operating plan, service cost outlook and development plans are subject to change at any time. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this communication are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. The risk factors and other factors noted herein and in the Company’s
All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events, except as required by law.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Company, its directors and certain of its executive officers and employees are or will be participants in the solicitation of proxies from shareholders in connection with the 2024 Annual Meeting. The Company has filed the Definitive Proxy Statement with the
The identity of the participants, their direct or indirect interests, by security holdings or otherwise, and other information relating to the participants are available in the Definitive Proxy Statement (available here) in the section entitled “Security Ownership of Board of Directors and Management” and Appendix F. To the extent holdings of the Company’s securities by the Company’s directors and executive officers changes from the information included in this communication, such information will be reflected on Statements of Change in Ownership on Forms 3, 4 or 5 filed with the
SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER DOCUMENTS TO BE FILED BY THE COMPANY WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Shareholders are able to obtain, free of charge, copies of all of the foregoing documents, any amendments or supplements thereto at the SEC’s website (http://www.sec.gov). Copies of the foregoing documents, any amendments or supplements thereto are also available, free of charge, at the “Investor Relations” section of the Company’s website (https://www.sbow.com/investor-relations).
1 As of 4/26/24. The total shareholder return (TSR) represents the total return earned on an investment in SilverBow common stock made on 12/31/20. For XOP, assumes that dividends were invested when received.
2 Non-GAAP measure. Refer to Appendix A to SilverBow’s
3 As of 4/26/24. The 1, 3 and 5-year total shareholder return (TSR) represents the total return earned on an investment in SilverBow common stock made at the beginning of a 1, 3, and 5-year period, respectively. For XOP, assumes that dividends were invested when received.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240428285736/en/
INVESTOR CONTACT:
ir@sbow.com
(281) 874-2700, (888) 991-SBOW
MEDIA CONTACT:
(212) 355-4449
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