Bowleven – Sick of paying the “Hart Discount”

As editor of ShareProphets.com I coined the phrase the “Hart Discount”. This is the massive discount in Bowleven’s share price, which shareholders have suffered as a result of CEO Kevin Hart’s poor stewardship of the business. I expect to wax lyrical about Hart’s many leadership failings over the coming weeks, but there is one fact that cannot be denied. The market has zero faith in his ability to run this company.

Since Bowleven completed the Etinde farm-out on 17 March 2015, the company’s shares have consistently traded below the company’s cash balance. This tells us everything we need to know about the current board.

That the directors have failed to do anything value-creative, during the worst bear market in the market for oil in living memory, further emphasises the point that the people in charge are not up to the job.

For a man who has delivered so little in terms of value creation, Kevin Hart’s remuneration package is an offensive joke. In the year ended 30 June 2016 Hart was paid $568,000 + expenses. Not bad for sitting on one’s backside, achieving the square root of bugger all!

Any proposal that sees Hart removed from Bowleven will surely have to be positive for the company and its long-suffering shareholders. The man is not capable of performing the role he is so generously paid for.

It remains to be seen whether or not Crown Ocean will requisition a general meeting to seek boardroom change and what proposals it might put to shareholders, but since it voted against Hart’s re-election at December’s AGM it must be a reasonable bet that booting him out of the company will be one of the priorities.