After the markets closed Monday, Bill Barrett (NYSE: BBG) chairman and CEO Fred Barrett stepped down from his positions with the North American oil and natural gas exploration and production company.
The Denver-based company has named current COO R. Scot Woodall as interim CEO while the company searches for a permanent CEO. Woodall has served as COO since July 2010. He also served as senior vice president, operations from 2007-2010 and as executive vice president of operations from February 2010-July 2010.
Jim W. Mogg, who serves as the lead independent director, has been elected as non-executive chairman of the board. A search committee of independent directors has been formed and is in the process of securing permanent leadership.
Barrett had served as CEO and chairman since March 2006, and as COO from June 2005-February 2006.
Asset change needed
While the news of Barrett’s resignation comes as a surprise to Stifel Nicolaus analysts, it is an asset base change, not a management change that the company needs.
Currently, the company holds assets solely in the Rocky Mountain region with its largest development programs in Colorado, Utah and Wyoming.
In a January 8 note to investors the analysts commented that “unless the company aggressively divests assets or meaningfully changes its asset base, the balance sheet, not the management, will be the limitation of how quick a transition from gas to liquids can occur.”
Part of the transition came as the company announced in November 2012 that it had signed a purchase and sale agreement with Vanguard Natural Resources to divest $335 million in natural gas assets.
Today, the analysts note that the company is currently in transition and has started to pull back capital to preserve balance sheet liquidity. While it expects the transition to occur at a slower pace than under a previous case of a more significant FCF outspend, “the framework is in place, and the transition will slowly show up in improved liquids weighting and stock price as 2013 progresses.”
“In our view, the biggest impact from a new CEO could be a reconstituted asset base that may include more aggressive divestitures of non-core assets or a narrower asset base,” they continued.