Spat erupts between oil explorer Bowleven and activist shareholder Crown Ocean

oil hands
Bowleven's spat with its largest shareholder has erupted in a public war of words Credit: VICTOR R. CAIVANO

East African oil explorer Bowleven has hit out against calls from its largest shareholder to reform itself ahead of a shareholder vote next month.

In an open letter the £100m oil group dismissed a swathe of claims made against the board by Crown Ocean Capital and urged investors to vote against its demands.

Bowleven said it did not believe that shareholders were best served by a series of public claims and counterclaims, but nonetheless slammed the accusations and proposals made by its majority stakeholder.

Crown Ocean, a Monaco-based offshore private investment fund, has called for a boardroom purge and demanded that Bowleven abandon its position as an exploration and production company in order to return excess cash to its shareholders and operate as a holding company.

Shareholders in the East Africa-focused company will vote on the fate of Bowleven's board on March 14

The fund has accused the seven-strong board of “questionable independence” because four of its members have previously worked at Cairn Energy, and also criticised its executive remuneration levels.

Crown Ocean’s plans include ousting from the board all but the chairman, former BP executive David Clarkson, and filling the empty seats with two new faces, Christopher Ashworth and Eli Chahin.

However, Bowleven responded by pointing out that neither of the nominees had significant experience in the oil sector, and would be “inconsistent with good corporate governance”.

The Bowleven board criticised the fund for inflating estimates of its executive pay by a third and accused it of plotting a “blatant attempt” at a cash-grab from the oil group, which emerged from the recent downturn in oil prices cash-rich and debt free, unlike many of its mid-cap peers.

Crown Ocean bought into Bowleven in June last year and raised its stake sharply; it now has a 16pc holding.

Oil industry commentator Malcolm Graham-Wood said: “I have never seen this lot around the oil and gas sector before... but they have bought a substantial stake and are entitled to try and shake things up.”

Bowleven's shares dropped 2.9pc to 33.50p in lunchtime trade. The stock has climbed 67pc in a year.

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