Old post I made on Yahoo Message Board defending HNR management

I am going to take the lazy approach to defend HNR management and copy & paste a 01/27/10 comment from a different message board (credit REAUX1318) and add Q1 2012 info.


Current management took over the company from a bankrupt Alex Benton in 2000: "As a result of Benton's increased leverage and poor investment returns since 1998, our equity and public debt values have eroded significantly. In order to effectuate the changes necessary to restore our financial flexibility and to enhance our ability to execute a viable strategic plan aimed at creating new stockholder value, we undertook several significant actions beginning in 2000, including: Hired a new President and Chief Executive Officer, a new Senior Vice President and Chief Financial Officer and a new Vice President and General Counsel; Reconstituted our Board of Directors with industry executives with proven experience in oil and natural gas operations, finance and international operations; Redefined our strategic priorities to focus on value creation; Initiated capital conservation steps and financial transactions to de-leverage the company and improve cash flow for reinvestment; Undertook a comprehensive study of our core Venezuelan asset to attempt to enhance the value of its production, thus ultimately increasing cash flow and potentially extending its productive life. We continue to aggressively explore means by which to maximize stockholder value. We believe that we possess significant producing properties in Venezuela which have yet to be optimized and valuable unexploited acreage in Venezuela and Russia. The intrinsic value of our assets is burdened by a heavy debt load and constraints on capital to further exploit such opportunities." http://www.sec.gov/Archives/edgar/data/845289/000095015201002063/l86922ae10-k.txt


Let's see how the current management team has done since joining the company in 2000 (and after the Venezuela nationalization which began in early 2006):

Select Balance Sheet Data

2000
Cash+Restricted Cash $26 million
Long-Term Debt $213 million
Current Liabilities $51 million
Cumulative Stock Buybacks $0
Shareholders Equity $13 million
Shareholders’ Equity Per Share $0.42
Basic Shares Outstanding 30.7 million
Diluted Shares Outstanding 30.9 million

2005
Cash+Restricted Cash $163 million
Long-Term Debt $0
Current Liabilities $62 million
Cumulative Stock Buybacks $0
Shareholders Equity $297 million
Shareholders’ Equity Per Share $8.05
Basic Shares Outstanding 36.9 million
Diluted Shares Outstanding 38.4 million

3Q2009

Cash+Restricted Cash $49 million
Long-Term Debt $0
Current Liabilities $19 million
Cumulative Stock Buybacks $62 million
Shareholders Equity $322 million
Shareholders’ Equity Per Share $9.70
Basic Shares Outstanding 33.2 million
Diluted Shares Outstanding 33.5 million

1Q2012
Cash+Restricted Cash $35 million
Long-Term Debt $0
Current Liabilities $36 million
Cumulative Stock Buybacks $62 million
Shareholders Equity $381 million
Shareholders’ Equity Per Share $10.19
Basic Shares Outstanding 37.4 million
Diluted Shares Outstanding 37.4 million

This does not look like value destroying management to me.