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Allan Markin’s resignation from Penn West’s board raises eyebrows

Former CNRL chairman formed half of the all-star team that headed Penn West's board

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July 05, 2013

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The game of musical chairs continues at Penn West Exploration, a company that has seen its long-time chairman resign, short-term chairman resign and now vice-chairman resign in the last few months.

Penn West announced Thursday afternoon that vice-chairman Allan Markin was stepping down from the company’s board of directors. Markin was chairman of Canadian Natural Resources Ltd. for years, and his arrival on Penn West’s board along with former Suncor Energy Inc. CEO Rick George caused a stir when it was announced in May.

The all-star combination of George and Markin as chairman and vice-chairman of struggling Penn West’s board was heralded as a welcome change in direction at the under-performing producer. A month after George and Markin took their places on Penn West’s board, the company announced CEO Murray Nunns would be leaving the company on July 1.

Now, a month after that announcement, Markin is leaving. In a statement issued by Penn West, George said: “We appreciate the contributions Al has made to Penn West in the time he was on the Board.  We will continue to focus on many of the areas of value enhancement he championed.”

But the company did not elaborate on what those areas were, or why Markin had left the company.

In a research note to clients, CIBC World Markets analyst Jeremy Kaliel said the motivation behind Markin’s departure is unclear and that he expected polarizing speculation on the resignation.

Kaliel did point out, however, that Markin recently purchased 3.1 million shares in the company. “We think it is unlikely he left due to a change in opinion on Penn West’s asset value,” Kaliel writes. The company also confirmed that Markin intends to remain long on Penn West.

Time will tell if other investors feel the same way.

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