Northern Oil and Gas has created a new board seat for its second largest investor, Bahram Akradi, reconsidering its recent rejection of the Life Time CEO.
Akradi has built a 9.8 percent stake in embattled Northern Oil, and last month asked for a seat on the Minnetonka-based company's board. In a June 13 filing with securities regulators, Northern Oil's board said that it was not "appropriate to increase its size at this time."
But on Monday, Northern Oil announced that Akradi had been "immediately" appointed to the board, which has been expanded from seven members to eight.
Richard Weber, Northern Oil's board chairman, said in a statement that the board looks forward to "Mr. Akradi's input and will work closely with him to create value for all of our shareholders."
Akradi said in that same news release that he looks forward to working with Northern "to pursue our shared goal of increasing value for Northern's shareholders."
Akradi disclosed in October that he had a 5.3 percent stake in Northern Oil, and has kept on buying shares since. Akradi noted in a federal securities filing that he would be an activist investor, and said in June that he intended to "get on the board and make the necessary moves to make the company as successful as it should be."
Northern Oil, which invests in oil leases and drilling projects in North Dakota, has been battered by the petroleum industry downturn of the last few years. Its stock is trading around $1.20, not far above a 52-week low of $1.05. The shares last traded above $5 in spring 2016, down steeply from their 2011 oil-boom peak of around $30.
Akradi built Chanhassen-based Life Time into one of the nation's largest fitness center operators. He has not been an activist investor, though Life Time itself came under pressure from shareholder activists in 2015 that wanted the then publicly traded Life Time to spin off its real estate assets. Akradi led a buyout to take the company private.
At Northern Oil, Akradi joins a board that over the past year has appointed two other new members from the company's largest shareholder, TRT Holdings, a Dallas-based firm with a 19.7 percent stake. TRT is an affiliate of Texas oilman and hotel magnate Bob Rowling.
Northern Oil turned a profit during the first quarter, but posted more than $1 billion in net losses in 2015 and 2016. Last August, the company's board fired its CEO and co-founder, Michael Reger, after Reger disclosed that securities regulators might be pursuing an enforcement action against him regarding another company, Dakota Plains Holdings. Later, Reger settled claims against him by the U.S. Securities and Exchange Commission for $8 million.
Reger sued Northern for wrongful termination. Northern Oil is being run by an interim CEO, Thomas Stoelk, who is also the company's chief financial officer.