Brooge Energy Ltd CEO Provides Update on Operations and Company Vision in Open Letter to Shareholders
13 Abril 2020 - 6:56AM
Brooge Energy Limited (“Brooge Energy” or the “Company”) (NASDAQ:
BROG), a midstream oil storage and service provider strategically
located outside the Strait of Hormuz, adjacent to the Port of
Fujairah in the United Arab Emirates (“UAE”) through its
wholly-owned subsidiary Brooge Petroleum and Gas Investment Company
FZE (“BPGIC”), today issued a letter to its shareholders from its
Chief Executive Officer, Nicolaas L. Paardenkooper.
Dear Shareholders,
2020 is set to be a significant year for Brooge
Energy as we expect to increase our storage capacity, accelerate
revenue growth and further entrench our position as a leading oil
storage provider in the Port of Fujairah, UAE, one of the largest
global oil export hubs.
Since listing on NASDAQ in late December 2019,
we have been working hard toward our goal of more than doubling our
oil storage capacity to 1,000,585 m3 (6.3 MMBbls), which is
expected to drive significant revenue growth starting at the end of
this year. While we are excited about what this means for the
business, we recognize that we are living through historic and
extremely volatile times, with the effects being felt across
international trade, the oil sector and capital markets, requiring
companies across the world to embrace more prudent and conservative
approaches to near-term business planning. We are committed to
adapting to the extraordinary events of recent weeks to ensure
Brooge Energy is well positioned to continue its strategy to build
shareholder value over the next several years. We are certainly
aware that the terminal industry is seeing strong demand; and other
industry leaders have recently made public comments about the
renewed search for oil storage. However, due to value at risk
shock, the credit market has deteriorated at a time when the
Company is in expansion mode. Therefore, as a precautionary
measure, and to prudently preserve cash, Brooge Energy has decided
to temporarily delay the issuance of dividend.
As mentioned in our earlier press release, our
existing Phase I facility is currently operating ‘business as
usual’. Looking ahead, our near-term priority is to complete
construction of our Phase II facility, and to conclude the Front
End Engineering Design (“FEED”) process of our phase 3 expansion
with up to 3.5 Million M3 storage capacity in Fujairah.
To ensure these plans stay on track, it is vital
that we keep a strong financial foundation as we build our
leadership position and navigate prudently through the current
extremely volatile global economic environment resulting from the
COVID-19 pandemic whereby countries around the world are locked
down. This is an extremely uncommon situation that most of us have
never experienced in our lifetimes. While our business model is
extremely resilient and is expected to continue to remain so, we
recognize the need for a prudent approach to cash expenditure given
the uncertainty in the market. For this reason, the Board of
Directors, as fiduciaries of Brooge Energy, has decided to
temporarily delay the issuance of the dividend, which was initially
planned for Q1 2020, in the best interest of the Company as a
result of the global crises that all businesses currently face. We
are monitoring the ongoing situation closely and it is the
intention of the Board of Directors and management to reinstate our
quarterly dividend when this short-term global crisis has
subsided.
While we are extremely disappointed to delay the
issuance of our first dividend, our management team and Board of
Directors believe this is the most financially prudent strategy at
this time to reduce our exposure to the volatile capital markets
and to proactively prepare our Company to remain robust in the
long-term. We did not make this decision lightly, and have done so
only in light of the significant and still evolving impacts of the
global pandemic in order to maintain financial discipline and
flexibility as we consider the capital requirements to advance our
growth strategy.
We remain committed to our long-term vision and
achieving its associated company goals and are diligently working
towards fulfilling it as a management team and board.
Sincerely,
Nico Paardenkooper Chief Executive Officer
About Brooge Energy Limited
Brooge Energy, formerly Brooge Holdings Limited, conducts all of
its business and operations through its wholly-owned subsidiary
Brooge Petroleum and Gas Investment Company FZE (“BPGIC”), a
Fujairah Free Zone Entity. BPGIC is a midstream oil storage and
service provider strategically located outside the Strait of Hormuz
adjacent to the Port of Fujairah in the United Arab Emirates.
BPGIC’s oil storage business differentiates itself from competitors
by providing its customers with fast order processing times,
excellent customer service and high accuracy blending services with
low oil losses. For more information please visit
www.broogeholdings.com.
Forward-Looking Statements This
press release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995, that involve risks and
uncertainties concerning BPGIC’s and Brooge Energy’ expected
financial performance, as well as their strategic and operational
plans. The actual results may differ materially from expectations,
estimates and projections due to a number of risks and
uncertainties and, consequently, you should not rely on these
forward looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These risks and uncertainties include, but are not
limited to: (1) the ultimate geographic spread, duration and
severity of the coronavirus outbreak and the effectiveness of
actions taken, or actions that may be taken, by governmental
authorities to contain the outbreak or ameliorate its effects; (2)
BPGIC’s ability to obtain financing for Phase III on commercially
reasonable terms; (3) BPGIC’s ability to negotiate and enter into
development and offtake agreements on commercially reasonable
terms; (4) the results of technical and design feasibility studies;
(5) the loss of any end-users; (6) changes in customer demand with
respect to ancillary services provided by BPGIC including
throughput, blending, heating, and intertank transfers; (7) BPGIC’s
ability to effectively manage the risks and expenses associated
with the construction of Phase II, Phase III and other growth and
expansion projects; and (8) other risks and uncertainties indicated
from time to time in filings with or submissions to the SEC by
Brooge Energy. Readers are referred to the most recent reports
filed with or furnished to the SEC by Brooge Energy. Readers are
cautioned not to place undue reliance upon any forward-looking
statements, which speak only as of the date made, and we undertake
no obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or
otherwise.
Investor Contact KCSA Strategic Communications
Valter Pinto / Elizabeth Barker +1 212-896-1254 or +1 212-896-1203
BROG@kcsa.com Investor.relations@bpgic.com
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