Madalena Energy seeks new leader to drive its interests in Argentina

There might not be an association just a few weeks after Madalena Energy announced a “strategic” acquisition along with a $27 million equity financing C two transactions that were cancelled  – the organization has a new interim chief executive.

On Thursday the company, which earlier this month announced instructions of intent to get one more 10 percentage point stake within the Coiron Amargo block in Argentina, bade farewell to Kevin Shaw since it’s president and chief executive officer.

The company has named Steven Sharpe, the chairman as interim president and chief executive officer. In time, Sharpe will direct the quest for a lasting leader.

David Tawil, a partner at 17 percent shareholder, Maglan Capital, described the change as “spectacular.” Tawil added that given the low share price, “trying to boost equity financing might possibly not have been the most ideal for that shareholder base. The board was not pleased with that direction,” he added, noting that Madalena “operates in one of the most dynamic gas and oil basins on the planet.”

One reason for that dynamism: in Argentina the oil price is fixed at US$67.50 per barrel.

Tawil argues that because of the high oil price and the flurry of activity, Madalena “has to go ahead and act strategically concerning the areas they control.” One way to pursue that goal could be through partnering with larger players. “You’re ready to get new blood into the [CEO’s] seat they are driving shareholder value,” Tawil says.

And Madalena is within a distinctive situation, because “it is the best way to get access to the skyrocketing activity in Argentina on a pure play basis through a company that has conventional and unconventional oil and gas production,” Tawil says.

Another insider asserted it had been “time for change,” considering the company’s decision to refocus its activities to Argentina C and away from Canada. “Given that we are centered on Argentina, the time had come to refocus the organization of Argentina and that we may as well start at the top,” added the insider.

That Argentina-focus may be easier to implement given the recent election of a new government and the expectation that foreign exchange controls will be lifted. “We need a bank line in Argentina,” noted the insider, ” but we couldn’t get one due to currency controls.” The organization has a Canadian bank line.

Investors were ho-hum on the news. On bigger than normal volume the shares are unchanged at $0.24.