Petroceltic gets backing of advisory groups ahead of EGM

Explorer is trying to fend off moves to oust its chief executive Brian O’Cathain

The board of Petroceltic says it has been endorsed by three leading shareholder advisory groups in its fight with investor Worldview.

The Dublin-based oil and gas explorer is trying to fend off moves by the Swiss hedge fund to oust its chief executive Brian O’Cathain.

It said top corporate governance advisory firms - ISS and Glass Lewis - have advised shareholders to vote against resolutions proposed by Worldview at a crunch EGM next week.

A third advisory group Pirc recommended shareholders abstain on a resolution to remove Mr O'Cathain, while voting against resolutions to appoint Worldview candidates, Maurice Dijols and Angelo Moskov, to the board.


The company claimed the recommendations represented a strong endorsement of its strategy and corporate governance.

"These three independent corporate governance groups have completed detailed analysis of this situation and have taken the views of both sides into consideration," Petroceltic chairman Robert Adair said.

“We welcome these conclusions and believe that this represents a vote of confidence in the existing board, its strategy and governance.”

The latest salvo in the increasingly fraught war of words between Petroceltic and Worldview comes ahead of next Wednesday’s EGM.

The Swiss fund, which owns a 29 per cent stake in the company, has been in a wrangle with management over a string of alleged corporate governance failings, which it blames on Mr O’Cathain.

It accuses Petroceltic of reneging on an agreement to undertake a strategic review of the company in return for Worldview’s consent to a $100 million share placing last year.

However, Petroceltic claims the allegations are merely a ruse to gain control of the company without buying it.

Last week, Mr O’Cathain said he was prepared to sit down and talk with Worldview but could not get the Swiss group to return his calls.

He also claimed he would not be surprise if energy group Dragon Oil, which aborted a bid to acquire Petroceltic in December because of the drop in oil prices, came back with another bid for the company.

In a broker’s note, Goodbody said: “As an independent entity we continue see value in Petroceltic, even if the lack of exploration success has limited near term catalysts.”

“In the circumstances, we are not surprised to see commentary that management would be open to a fresh approach from Dragon Oil.”

"Whether that emerges or not, consolidation around the core assets of Algeria and Egypt and pressure from an activist shareholder is likely to see Petroceltic feature as a potential M&A target."

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times