Zargon Oil and Gas Ltd bows to hedge fund pressure and chops dividend

Craig Hansen, president and CEO at Zargon Oil and Gas. They company cut its dividend Monday after being pressured by an American hedge fund.

CALGARY C An American hedge fund got the outcomes it wanted in pushing management at Zargon Gas and oil Ltd. to chop the company\’s dividend.

Livermore Partners had been pushing Calgary-based Zargon to get rid of its dividend entirely however the fund\’s managing director David Neuhauser said within an email the changes Zargon announced Monday were \”consistent using what we requested\” and over time, \”will become very positive.\”

Zargon, a light oil producer centered on Alberta and Saskatchewan, announced it was cutting its monthly dividend to one cent from three cents per share Monday C just four days after Northbrook, Illinois-based Livermore Partners delivered instructions to the company\’s board demanding a re-think of its dividend policy.

\”Zargon for now, must escape from its yieldco model towards seeking equity price appreciation,\” Neuhauser wrote in his letter dated June 18.