The shares of Gulf Keystone Petroleum (LSE: GKP) gained 6p to 178p during early trade this morning after the oil explorer caved in to boardroom changes demanded by M&G.
The AIM-traded favourite, which has discovered up to 15 billion barrels of oil in the Kurdistan region of Iraq, had previously instructed its shareholders to vote against M&G’s proposed non-executive candidates at the group’s AGM on 25 July.
However, Gulf Keystone said this morning that it had reached a “constructive agreement” with M&G, whose £7.4bn Recovery Fund owns 5.1% of the company.
Gulf Keystone confirmed today’s agreement followed “a number of discussions… during which the concerns expressed by [Gulf Keystone]… were fully aired and addressed.“
Simon Murray, Gulf Keystone’s chairman, said:
“I am pleased that unity of purpose has been restored amongst the Company and its largest shareholders… We can now return our focus to the important objective of creating value for all shareholders and continue to deliver operational success.“
Mr Murray also claimed:
“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.“
This time last week, Mr Murray said the appointment of M&G’s nominated directors would be “a backward step” and the oil group described Jeremy Asher as having been “highly disruptive” during an earlier stint on the board.
Still, today’s share-price advance has further increased Gulf Keystone’s market cap, which has soared from £122m to £1.4bn following the group’s 2004 flotation.
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> Maynard does not own any share mentioned in this article.