Palo Alto calls for special meeting to replace Canadian Superior Energy board

By Lisa Kerner

Charlotte, N.C., Feb. 17 - Palo Alto Investors, LLC requisitioned a special meeting of Canadian Superior Energy Inc.'s shareholders for the purpose of removing the incumbent board of directors and replacing it with Palo Alto's slate of nominees.

The move is in response to "a culmination of events," according to Palo Alto partner and head of energy research David Anderson.

"Recent developments relating to the company's key strategic assets in Trinidad, as well as the ongoing conflicts of interest at the board level, have forced us to take this step," Anderson said in a news release.

Anderson said the current board may have lost sight of its fiduciary duty to act in the best interests of Canadian Superior.

Previously, Palo Alto asked Canadian Superior to hold a public conference call to update shareholders on the financial position and status of the proposed monetization of part of the company's Block 5(c) assets in Trinidad and Tobago.

The investor made its request prior to Canadian Superior's announcement that the court has appointed an interim receiver to operate the property in conjunction with BG International Ltd. at a cost to Canadian Superior of up to $47 million.

Palo Alto does not believe the planned monetization is in the company's best interests and asked that any potential deal be postponed, according to a schedule 13D/A filed with the Securities and Exchange Commission.

In the past, Palo Alto has voiced concerns about conflicts of interest between Canadian Superior and Challenger Energy Corp., a vehicle formed to secure financing for the Block 5(C) project and led by Canadian Superior executive chairman Greg Noval.

Palo Alto owns 15,752,500 shares, or 9.3%, of the company's common shares outstanding.

Based in Calgary, Alta., Canadian Superior is a crude oil and natural gas exploration and production company with an emphasis on exploring for and producing crude oil and natural gas in western Canada, Nova Scotia and Trinidad and Tobago.

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