Vaalco warns shareholders about hedge fund's motives

By Lisa Kerner

Charlotte, N.C., May 8 - Vaalco Energy, Inc. urged its stockholders to vote for the company's "highly qualified and experienced directors" at the annual meeting on June 4.

The company's nominees are:

• W. Russell Scheirman, Vaalco president and chief financial officer;

• Arne R. Nielsen, former president of Mobil Oil Canada; and

• William S. Farish, Vaalco director and former ambassador to Great Britain.

In a open letter to stockholders, chairman and chief executive officer Robert L. Gerry III cautioned that New York-based hedge fund Nanes Delorme Partners I LP began a proxy contest in "an attempt to install its own paid nominees" onto Vaalco's board of directors.

Nanes Delorme has a history of brokering the sale of oil and gas assets, the letter said. In addition, the investor has said its nominees would seek to begin a sale of Vaalco, according to Gerry.

Gerry said Nanes Delorme only recently purchased its Vaalco shares, with the majority of them purchased by the hedge fund's "newly revealed secret partner" Pilatus Energy SA, an oil and gas company with headquarters in Zug, Switzerland.

According to the letter, Pilatus Energy's head was convicted and sentenced by a French court for fraud, embezzlement, bribery and kickbacks.

Vaalco Energy is a Houston based independent energy company.

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