New Tullow chief executive defends Heavey as chairman
Tullow Oil's appointment of outgoing chief executive and founder Aidan Heavey as chairman is not necessarily best governance, but is in the company's interest, incoming chief executive Paul McDade has insisted.
Mr McDade, until yesterday Tullow's chief operating officer, was confirmed by shareholders at the annual general meeting in London yesterday as the company's new chief executive. His planned appointment was unveiled by Tullow back in January. Under the plan, Mr Heavey will leave the company within two years.
Mr McDade said the company had consulted various investors about the proposal and had moved ahead based on those discussions.
Shareholder Royal London Asset Management said it would vote against the proposal at Wednesday's annual general meeting, saying it violated corporate governance principles designed to ensure independent oversight of the board.
"We acknowledge that in terms of governance practice it wouldn't be considered best governance but we do think it's the right thing for us to do as a company," said Mr McDade.
The oil company also updated the market yesterday on first-quarter trading, saying it had cut net debt by $200m to $4.6bn (€4.2bn) in the first three months of the year.
Tullow announced a $750m rights issue on March 17 to raise money to bring debt below $4bn. Earlier this week it said that investors had subscribed to all the shares.
Debt reduction will allow the company to spend more of its free cashflow on finding oil, including expanding the search around its TEN fields off the coast of Ghana and tapping fresh resources in Suriname.
Tullow also said yesterday that it has reached an agreement to sell its Dutch assets to Hague and London Oil. (Reuters).