Gulf Keystone Petroleum Limited Caves In To M&G’s Board Demands

Gulf Keystone Petroleum Limited (LON: GKP) decides to endorse the four non-executive candidates proposed by M&G.

Maynard Paton

Maynard has worked at the Fool since 1999. He ran the Qualiport online portfolio on the Fool from November 1999 to September 2005 and was lead adviser for the Champion Shares & Champion Shares PRO stock-picking services from September 2005 to June 2011, at which point he moved to become Deputy Editor of the UK Fool. Prior to joining the Fool, Maynard worked for a year as a Poll Tax clerk and then for six years at the local authority's IT department in the murky world of ICL mainframes and COBOL programming. He relocated to Kent to join a financial services firm's IT department and there discovered the joys of stock market investing. As well as keeping an eye on share prices and his local housing market, Maynard's interests include karting, martial arts and entertaining his young family.

Published 22 July, 2013 9:07 am BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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.

Certainly such returns emphasise how the resources sector can produce wealth-changing gains for ambitious investors.

And that’s why The Motley Fool has published this exclusive oil report to help you lock in such enormous profits.

By reading the report, you can learn how to evaluate an explorer’s prospects and discover the names and opportunities that may have the greatest upside potential in the years to come.

You can download this free oil report by clicking here.

> Maynard does not own any share mentioned in this article.