Re: Lucas Energy, Inc. (LEI)
Hi Paul - A possible Red Flag for LEI.
On Friday February 18, 2011 Lucas Energy announced the resignation of John O’Keefe from his positions as Chief Financial Officer, Secretary and Treasurer of the Company. biz.yahoo.com This is the second CFO to be replaced in one year for the company.
O'Keefe has a checkered past, so it may be a positive for Lucas Energy to have him gone (see the O'Keefe bio at bottom of post).
The one positive is that the person they appointed was K. Andrew Lai a former employee with Far East Energy Corp. (FEEC.OB).
Mr. Lai, age 44, joined Far East Energy in January 2007 and currently serves as Corporate Controller and Treasurer. He has also served as General Counsel and Secretary of the Company, and will retain his responsibilities as Corporate Secretary when he becomes Chief Financial Officer. Prior to joining the Company, Mr. Lai held financial management positions with EOG Resources, Inc. (EOG).
---------------------------------------------------------------------
Here is the positive the way I see it. Mr. Lai has ties with China United Coal Bed Methane (CUCBM). CUCBM had partnered with Far East Energy on several NG production & gathering deals ( article.wn.com )in the past. Lai was responsible for setting up these partnerships. In December 2010, China National Offshore Oil Corp. reported that they were considering buying a 50% stake in CCUBM.
Therefore, Lai brings a possible Chinese connection/partner with deep pockets to Lucas Energy, Inc.
The CEO of Lucas Energy likes to have JV partners that will help finance future well development deals and perhaps Andrew Lai was brought in to exploit his Chinese ties.
Lai also had previous experience working with EOG Resources, Inc. (EOG), so he does bring extensive industry experience to his new job.
I still do not like the idea that two different CFO's in the last year were entrusted with the CFO job. The most recent appointee O'Keefe was hired October 7, 2010 after serving as CFO at HDY for only 11 days! His dismissal occurs only days after the company releases their 10Q (2/14/2011) which contained some significant one time charges and lower than expected Q4 revenues from production well(s) due to "...inventory accounting issues... Oil that was supposed to be transported and sold was delayed and kept in storage tanks at the well site(s) perhaps due to a cumulative water/oil contamination problem). This was the first 10Q he was responsible for preparing and was terminated from the company after its release.
Therefore, I will continue to hold my small position and see if this recent event turns out to be a net positive or negative for the company.
EKS
FWIW - Here is the Bio of the previous CFO JOHN O’KEEFE. He was 61 at the time.
lucasenergy.com
He was brought in through an agency called Tatum LLC which specializes in interim management positions.
From Tatum LLC Web site:
"...Tatum is the largest Executive Services firm in the U.S., with services that include interim executives, financial and technology consulting and executive search...
On October 7, 2010
The Company has appointed John O'Keefe, a partner of Tatum LLC, as interim Chief Financial Officer, Secretary and Treasurer. ( yahoo.brand.edgar-online.com )
On August 2, 2010
The employment of John O’Keefe with Hyperdynamics Corporation (the “Company”) was terminated including the positions of Executive Vice President and Chief Financial Officer. ( investors.hyperdynamics.com )
Something smells fishy with Mr. O'Keefe!
On July 21, 2010
Hyperdynamics Names John O'Keefe Chief Financial Officer ( investors.hyperdynamics.com ). He received a pretty extensive employment contract from HDY. |
