SilverBow Resources shareholder Riposte Capital issues letter to shareholders

SilverBow Resources shareholder Riposte Capital, one of the largest shareholders of SilverBow Resources, owning approximately 6.7% of the company’s outstanding common stock, sent a letter to SilverBow’s Board of Directors. Highlights of the letter include: “…we recognize the material unrealized value in SilverBow’s assets across an important basin, and can no longer just hope that you will do better…You have proven yourselves incapable of being credible stewards of capital or corporate governance. It is clear to us, and likely many others in the investment community, that you have no interest in enabling shareholders to exercise their right to participate in the strategic decision-making process. You also appear to have no intention of engaging in good faith discussions with potential suitors….You have continued to pursue a value destructive strategy, which has: Further entrenched the Board; Significantly depressed SilverBow’s share price; Widened the company’s already material peer group discount; Added significant debt to an already fragile balance sheet; and Made the Company less attractive to potential acquirers…SilverBow traded at a 40% discount to peers with a mere EV/EBITDA multiple of 1.9X. Five months later, as a result of your misguided strategic initiatives, you have increased SilverBow’s valuation discount to approximately 50% vs. the peer group…We specifically advised you to avoid dilutive acquisitions given your lack of scale, financial profile and modestly valued equity. However, a mere two months after our public letter you went ahead and made a $700M “transformational” acquisition of Chesapeake’s South Texas position. Sean…because of your poor financial profile, you were compelled to issue fresh equity, 12% discounted to an already undervalued share price – an irresponsible tactic that was highly prejudicial to the interests of your shareholders, precisely what we foresaw and advised against in prior communications…The existence of this poison pill has been widely criticized by both investors and Institutional Shareholder Services, a leading proxy and corporate governance advisory firm….we have concluded that in order for the best interests of the Company to be served, the composition of your Board must be materially altered at the 2024 annual meeting of shareholders. Three new and independent candidates must be nominated and elected by shareholders – the true owners of SilverBow…”