Lone Star Value Questions Antares' Asset Sale Announcement

NEW YORK, July 8, 2014

Lone Star Value has serious concerns with Antares' latest announcement that it has received a non binding proposal from a bidder for all its Permian Basin assets for US$300 million and questions whether or not the proceeds from an asset sale by the current Board would result in cash ever being returned to Antares' shareholders.

Lone Star Value's own valuation of Antares' Permian Basin assets – which centres on the proven Southern Star properties – ranges from US$250 million to US$450 million with a mid-point of $350 million.  Lone Star Value believes Antares' announcement should be treated with scepticism given the same proposal for the exact same amount failed to materialise earlier this year.  In addition, the issuance of dilutive convertible debt at a high coupon rate (10%) just last week appears to be at odds with a company about to sell all its assets for cash.

Commenting on the proposed sale, Jeff Eberwein of Lone Star Value noted that Antares CEO and Chairman, James Cruickshank, has lost credibility with the vast majority of Antares' shareholders and should not be trusted to lead the sales process without the oversight of a new, independent Board.

"This latest news from Antares seems to be another example in a long pattern of random and incongruous decision-making by an unchecked CEO.  We find it extraordinary that Mr Cruickshank has trotted out the same failed deal in what appears to be an attempt to defeat our efforts to enhance Antares' Board by removing employee directors and adding new, independent, highly-qualified directors."

"Mr. Cruickshank unilaterally cancelled the previous proposed transaction after Antares' shareholders overwhelmingly approved the deal at an extraordinary general meeting in January.  The shareholders were never informed of the identity of the buyer.  All Mr. Cruickshank told shareholders is that the asset sale for US$300 million delivered less shareholder value than if the company were to develop these assets itself.  We question what has changed at this juncture to cause Antares to re-engage in a sale process when its own stated plans consider an overly-ambitious and ill-conceived $979 million multi-year capital expenditure programme hatched after the previous failed sale process."

"We are again being told that an asset sale is under consideration less than two weeks after the company announced a highly dilutive and expensive convertible note issue to raise $19.5 million.  Why raise so much new capital if Antares is about to sell all its assets for cash?  This strategically incoherent approach of a CEO who changes his strategy every few months is, in our view, why Antares' stock trades at a significant discount to its asset value.  Given how shareholders were treated earlier this year, we have no faith that this new proposed sale will be seen through to its conclusion or properly overseen absent an overhaul of this Board, nor do we have any faith in cash being returned to shareholders in the event that a sale actually materialises."