Activist investor Crystal Amber Fund (AIM: CRS) has taken a scathing parting shot at West of Shetland operator Hurricane Energy after exiting its shareholding.
Crystal Amber was an early backer of the firm, saying in 2015 that “if things go according to plan, Hurricane will be capitalised in the billions, not in the low hundred millions”.
However CRS said it has still achieved value for its shares which “could have only been dreamt of” at the start of 2022.
“Since the adoption of the new investing policy, the most time consuming and perhaps jointly, the most stressful holding for the Investment Manager was Hurricane Energy,” it said.
“Nevertheless, despite the significant operational risk of being a single oil well, single pump producer, a difficult executive team and the imposition of the energy profits levy, the Manager succeeded in not only significantly reducing the risk of the investment but achieved cash returns of a magnitude that perhaps could have only been dreamt of at the beginning of 2022.”
The Guernsey-based fund was a vocal critic of the board, including later plans to restructure which would have wiped out shareholder value.
Earlier this year Hurricane Energy was bought by Prax Exploration, delivering a boost to CRS.
At the start of 2022, Crystal Amber held nearly 30% of Hurricane Energy shares, with a carrying value of £23m.
Following the sale to Prax Exploration in June, the fund received £34.7m. Further contingencies could see it receive a total of £72m.
Crystal Amber adopted a plan in March 2022 to monetise its portfolio.
“Hurricane Energy is an example of the Investment Manager’s determination to fight for Shareholders when necessary and the financial reward in doing so,” the fund added.
“Shareholders will recall the 2021 judgement from the High Court which prevented a 95% dilution for ordinary shareholders which the Hurricane Energy management had sought to push through.
“Whilst market participants had written off Hurricane Energy as little more than an embarrassment, the Investment Manager, with its long standing and deep technical knowledge, fought and succeeded in blocking the restructuring.
“Without the Company’s intervention, Shareholders would have been deprived of any meaningful exposure to this improvement in the Company’s fortunes.”
Prax Exploration said, following its takeover of Hurricane, it plans to expand its portfolio in the North Sea six-fold through further acquisitions.
The wider group is a major supplier of petroleum products in the UK, and Hurricane was among a “handful of names” on a shortlist for it to go into upstream and diversify the portfolio.