Vaalco Energy Inc.'s largest shareholder has urged the independent energy company to consider putting itself up for sale, according to a Securities and Exchange Commission filing on Wednesday.
In morning trading, Vaalco shares jumped 17 cents, or 3.5 percent, to $5.06. The stock has traded between $3.62 and $5.99 during the past 52 weeks.
Nanes Delorme Partners I LP reported holding 4.7 million Vaalco shares, representing an 8 percent stake in the Houston-based company.
In a letter to the board dated Tuesday, Nanes Delorme Managing Member Julien Balkany said a sale of the company could fetch a minimum of $7.12 per share.
"During this period where most exploration and production companies have benefited from the recent historical surge in oil prices, we find the company's steady stock price decline to be particularly alarming," Balkany said. "Despite this continued underperformance, management does not seem to be taking effective action."
Balkany asked the company to consider a possible sale along with other strategic alternatives, including the divestiture of its West African portfolio. In addition, the investor urged asked the company to reduce its presence in the North Sea and close its office in Aberdeen, Scotland.
Finally, the shareholder asked the company to reconsider the makeup of its board, as well as its corporate governance practices.
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