Compton "Puzzled" by Shareholder Request

The Calgary-based company cited several challenges that affected its stock recently, including low natural-gas prices, the appreciation of the Canadian dollar, high costs and regulatory issues.

"Given these cyclical bearish factors and the upcoming release of our 2007 year-end reserve report and audited financial statements, the board and management are puzzled by the shareholder's request and particularly with its timing," Compton said in a statement.

Centennial Energy Partners LP, which holds 19.8 percent of Compton's outstanding shares, expressed doubt in a statement Friday that Compton management has a plan to boost its stock price. Compton shares fell more than 12 percent since the beginning of the year to close at $8 on Thursday, but surged 14 percent to close at $9.12 on Friday following the Centennial statement.

While Compton's management said it is open to capitalizing on strategic opportunities like a sale, it indicated that the longer-term strategy is more favorable. Its reserves, assets and drilling prospects, combined with a "bullish" outlook for natural gas "bode well" for such a strategy, Compton said.

Compton currently plans to accelerate drilling natural-gas reserves, converting them into incrementally larger production volume. The company said it will report plans for 2008, including planned expenditures, drilling programs and production targets, in early January.