Oil exploration company Gulf Keystone has backed down in its boardroom feud with a major shareholder, just days before its AGM.
The Kurdistan-focused firm had originally opposed four nominees put forward as non-executive directors by investment group M&G.
But the company confirmed this morning that Gulf Keystone would now not oppose the candidates for the board that the investment group had put forward after further talks with M&G.
In return, M&G will vote to approve the election of former Glencore chief Simon Murray as non-executive chairman.
The move will also see existing board members Ali Al-Qabandi – who co-founded Gulf Keystone – and Mehdi Varzi step down from their roles.
“I am pleased that unity of purpose has been restored amongst the company and its largest shareholders,” said Murray.
“This increase in the number of independent non-executive directors will ensure that Gulf Keystone meets the heightened corporate governance standards required as part of the company’s planned move to the standard segment of the main market that both the board and the shareholders have been seeking, in a manner that provides reassurance to all.”
The move comes after an acrimonious war of words between M&G and Capital Research, who together own more than 10% of the company, and the board, which threatened to overshadow the AGM and an impending move onto the main stock exchange.
M&G had put forward four candidates, including former Gulf Keystone deputy chairman Jeremy Asher, as nominees to serve on the board in an effort to ‘strengthen corporate governance’ at the oil firm.
In response, the company had said the candidates did not have “the consistent track record of successful operational and commercial experience, in any sector, that is required for a FTSE 250-sized company” and accused Asher of having “previously been a disruptive presence” on the company’s board before his removal in 2010.
“I am especially pleased to have been able to bring Todd Kozel and Jeremy Asher back together, on a board that is much the stronger for both of their presences,” said Murray.
“We can now return our focus to the important objective of creating value for all shareholders and continue to deliver operational success.
“Our transition to becoming a significant oil producer in the region is on track as we target a ramp up in production to 40,000 bopd by the year end, as set out in the recently agreed Shaikan field development plan.”
Gulf Keystone had said it was interviewing its own candidates for the board, after M&G had expressed unhappiness over the levels of executive pay and bonuses received by senior management, including chief executive Todd Kozel.
The search process for the remaining directors for the board is now set to be completed following this Thursday’s AGM.
Gulf Keystone was last month given approval for its flagship Shaikan field in Kurdistan, which is due to move into commercial production over the next few weeks, and expected to produce up to 250,000 bopd by 2018.