A group of investors calling themselves the Concerned Shareholders of Blacksteel Energy Inc. has formally requisitioned a shareholder meeting to replace key members of the company’s board of directors.
Holding more than 5% of Blacksteel’s outstanding shares, the group aims to oust Eugene Chen, Bettine Pierre-Gilles, and Arthur Madden and install four new directors: Jeff Callaway, Shubham Garg, Michael Schnell, and A. Paul Gill.
The Concerned Shareholders insist that urgent leadership changes are necessary to steer Blacksteel in a direction that benefits all stakeholders. They have requested that the board schedule the meeting no later than May 20. If the company does not comply, the group will take independent action to notify shareholders of a meeting.
The dispute centers around Blacksteel’s proposed sale of its Girouxville oil and gas assets, announced on March 4.
The Concerned Shareholders argue that this transaction would leave Blacksteel with little to no value after settling outstanding debts. They claim that the remaining shallow natural gas wellbores generate insufficient revenue to sustain operations and come with substantial abandonment liabilities.
The group has also highlighted the company’s declining production, which has dropped 83% from 100 boe/d in November 2023 to just 17 boe/d by January 2025.
Meanwhile, Blacksteel’s net cash obligations have more than doubled to an estimated $2.6 million. They further criticize the board for failing to file timely financial statements, leading to a cease trade order on the company’s stock since November 2023.
Jeff Callaway, one of the proposed new board members, has prior experience with Blacksteel, having raised over $2 million in equity funding and secured advantageous joint venture deals for the Girouxville assets.
His company, Energize Natural Resources Ltd., submitted multiple offers to acquire these assets, which he claims were superior to the proposed sale, yet received little response from the current board.
The Concerned Shareholders assert that with prudent capital spending, the Girouxville assets could generate more value for shareholders than the current proposed sale. They plan to pursue strategic alternatives, including drilling operations and lifting the trading halt on Blacksteel’s stock, if their proposed board members are elected.
The group collectively controls approximately 10.7% of Blacksteel’s outstanding shares and includes individuals and entities such as Callaway, Michael Schnell, Jo-Anne Schnell, Kenneth Schnell, Brad Schnell, Darren Abbott, A. Paul Gill, Abbott Petroleum Consulting Inc., Birchmount Properties Limited, and Altan Mehmet.
DISCLOSURE: Callaway is a shareholder of the Western Standard and sits on the Board of Directors.