Circle Oil chair retires after '10 years of pain'
THE chairman of listed exploration company Circle Oil resigned yesterday, despite having apparently planned to stand for re-election to the position, amid apparent shareholder discontent at the troubled oil and gas firm.
In a surprise development at the company's annual general meeting, Thomas Anderson announced he was retiring with immediate effect and has been replaced by Nick Clayton.
Mr Anderson had originally allowed his name to go forward for re-election when the notice of the meeting was posted three months ago, but, in an unusual move, told the meeting that his retirement was "long planned".
The resolution to re-elect Mr Anderson was therefore withdrawn, as was another one that would have allowed the company the power to issue new shares.
The re-election of another director, Keith Morris, was strongly contested with 61.5 million shares – about 40pc of votes cast – against his reappointment, with only 84.6 million voting for his re-election. Another 7.5 million shares were at the discretion of chairman Mr Anderson, who backed Mr Morris.
It is believed that Audley Capital Advisors, which owns 9.75pc of the company, and Matterhorn Investment Management, which holds 4.9pc, were among those investors who voted against Mr Morris's election.
Matterhorn declined to comment on the vote and messages left with Audley Capital were not returned.
Announcing his retirement, Mr Anderson said he had endured "10 years of pain" with Circle and felt it was "the right time to step down and allow a new chairman to take the helm as Circle continues its development".
Speaking to reporters after the meeting, Mr Anderson explained what he meant by "pain".
"Small exploration and production companies with no cash flow have to raise funds all the time so it's a difficult position to be in.
"It is easy to have blue skies projects but you have to turn them into cash flow, keep governments onside, and deal with things that don't always happen on time," he said.
Most of Circle's operations are in North Africa and Mr Anderson acknowledged the Arab Spring had been a "disaster" from a business perspective.
The Tunisian energy ministry had changed five times and the Egyptian equivalent four times in the last two years, leading to delays and additional paperwork for the business.
While all its operations had not been affected by the fallout of the political issues in the region – its Egyptian operation is in the desert some 300km outside Cairo – the Spring had decimated investor sentiment regarding businesses operating in the region.
Company chief executive Professor Chris Green acknowledged the company's share price had struggled of late, but said he was hopeful the stock can recover.
Earlier this week, Circle said that in the six months to the end of June, its profits rose 10pc to $14.7m (€11.3m) on the back of revenue of $42.3m.
The shares closed at 20 pence in London yesterday, giving the firm a valuation of £112m.