Troubled Gulf Keystone Faces New Board Exodus

The embattled London-listed oil group Gulf Keystone Petroleum is facing a fresh boardroom crisis with the potential exit of three board members just days before its annual shareholder meeting.

Sky News has learnt that leading City investors in Gulf Keystone have told the company that they plan to vote against the re-election of V Uthaya Kumar, Joseph Stanislaw and Maria Darby-Walker at next week's AGM in Paris.

The move threatens to embroil Gulf Keystone in a renewed corporate governance crisis, and raises the bizarre prospect of its new chief executive being unable to join the company's board because it would have too few directors based outside the UK.

Sources said on Thursday that the trio of directors, who were appointed by the previous chairman but were not associated with earlier governance rows at Gulf Keystone, could resign as soon as Friday morning.

It remains possible that one or more of the directors could decide to stay and fight for their positions at the meeting next week, they added.

At least one of them is said to have ongoing concerns of their own about the company's governance.

Gulf Keystone's diverse retail shareholder base means that the influence of large institutional investors is likely to be exacerbated in the outcome of votes on resolutions at the AGM.

A person close to Gulf Keystone said that its interim chairman, Andrew Simon, was also likely to step down later this year and that a search was "well under way" for a permanent chair.

Sky News revealed several weeks ago that Lord Guthrie, a former chief of Britain's Defence Staff and adviser to Tony Blair during his premiership, had decided to step down at the AGM.

Gulf Keystone has tried to draw a line under persistent leadership rows by installing Jon Ferrier, a former Maersk Oil executive, as its new boss.

However, the Bermuda-based company's by-laws state that a majority of its directors must be based offshore, meaning that it will be non-compliant if the trio of non-executives step aside.

A Gulf Keystone insider played down the significance of that development, but said it was natural that it was focused on establishing a smaller, more focused board.

The company, which moved from London's junior AIM market to the main list last year, has been holding talks with parties interested in acquiring assets or the entire company.

While it has met a target of producing 40,000 barrels of oil per day, it has been hurt - like rivals such as Genel - by delays to export payments from the Kurdistan Regional Government, which is battling the threat of Islamic State insurgents.

Although Gulf Keystone and other foreign oil companies have begun to receive some multimillion dollar payments, the company's indebtedness has left it confronting a financial crunch, triggering a recent £30m fundraising.

Todd Kozel, its former boss, stepped down from the role last year following hints of a further shareholder revolt, although his exit has been accompanied by those of a number of independent board members elected as part of the 2013 peace deal.

Shares in Gulf Keystone have slumped by more than 60% during the last 12 months, valuing it at just £351m, while it continues to carry debts of nearly £400m.

Gulf Keystone declined to comment on Thursday.