Big rise in boardroom pay at Edinburgh-based Bowleven after Cameroon oil and gas deal

Mr Hart and three other UK-based directors shared in bonuses totalling $453,000 after Bowleven completed a $250m stake sale in Cameroon in March. The bonuses related to objectives set in 2012.

Chief Tabetando, the Cameroon lawyer who resigned from Bowleven’s board in May, received termination benefits worth $243,000 and a bonus of $90,000. His total pay and benefits increased to $717,000 from $458,000.

The Cameroon stake sale left Bowleven sitting on a big cash pile at a time when oil and gas firms are grappling with the fall out from the crude price plunge.

Directors have said Bowleven has been inundated with calls from investment bankers trying to sell it oil and gas assets since the sale completed. Bowleven last week announced plans to buy stakes in two licences in Tanzania from Aminex in a deal worth up to $28m.

However, Waseem Shakoor, who has a substantial shareholding in Bowleven, said the proposed deal appeared to be a rotten one for the company’s shareholders.

Mr Shakoor noted African exploration specialist Tullow Oil had withdrawn from one of the licences, in 2011. He suggested gas production from the other licence would have minimal value.

Mr Shakoor said the fact Bowleven’s share price had not increased after the deal was announced indicated investors were unconvinced about its merits.

Another private investor, Tim Kempster, said the Bowleven board had to provide a clear explanation of the expected costs and benefits.

Mr Hart said: “We have screened a hell of a lot of deals and this is one for a variety of reasons, both technical and commercial, we like.”

He noted big finds had been made off Tanzania since Tullow withdrew from the Ruvuma licence. A gas export pipeline and processing facilities have been installed nearby.

The deal with Aminex is subject to the completion of satisfactory due diligence by Bowleven and to approval by its board.

While the transaction would not be big enough to require shareholder approval, the vast majority of institutional shareholders contacted by Bowleven’s brokers have been supportive. Mr Hart said feedback from other private investors has been positive.

When the Cameroon stake sale was announced Mr Shakoor said he was “shocked by the value destruction that has been crystallised by the deal”. He said he would rather the company be sold than remain under the management of the team lead by Mr Hart.

Mr Kempster asked directors at the 2013 general meeting: ““Isn’t it best to hoist a ‘for sale’ sign and put us shareholders out of our misery?”

In the annual report Mr Hart and Bowleven’s chairman, Ronnie Hanna, said the firm made significant progress in the year to 30 June. They said completing the sale of stakes in the Etinde permit off Cameroon to the country’s New Age and Russia’s LUKOIL, for $250m in total, was a highlight. The sale was agreed in June last year.

Noting the sharp fall in the crude price since that month had posed challenges for the industry, they wrote: “The consummation of the deal ... has helped ensure that Bowleven is well positioned to ride out the storm.”

Former commercial director Peter Wilson, who resigned from the board in May, received a bonus of $71,000 after the Etinde deal completed. Exploration director Ed Willett got $81,000.

Bowleven said the men and Mr Hart re-invested the full sum received from their bonuses, net of any tax due. They spent £142,000 in total buying Bowleven shares at 30p each in March.

Finance director Kerry Crawford got a $10,000 share award.

Shares in Aim-listed Bowleven closed down 0.5p at 24p yesterday.

Mr Wilson earned $375,000 in total in the year to June, against $356,000 last time. Mr Willett’s total pay rose to $481,000, from $395,000.

The total boardroom paybill increased by 27 per cent, $0.8m, to $3.7m from $2.9m.