On 6 September 2007, Max Petroleum Plc announced that it had suspended its CEO, Steve Kappelle, and COO, Ole Udsen, pending the outcome of an internal investigation, which included potential breaches of their employment contracts.
The Company’s investigation was led by Barlow, Lyde & Gilbert LLP, a leading international law firm. The investigation primarily focused on certain related party transactions, including the undisclosed receipt of share options by certain employees and members of senior management that were issued by the Company as partial consideration for the Astrakhanskiy contract area acquired in January 2006, as well as the possible diversion of corporate opportunities.
The Company’s internal investigation is now nearing completion and the disciplinary processes which resulted have led to the dismissal of its Chief Executive Officer, Steve Kappelle, Chief Operating Officer, Ole Udsen, and five other employees.
The Board does not believe that any of the issues investigated have had, or will have, a material negative impact on the Group’s licences, assets, core business, or financial condition.
The Company has engaged Preng & Associates, Inc., a global energy executive search specialist, to assist it in identifying replacement personnel. In the interim, two directors, Bob Holland and Lee Kraus, will serve as interim CEO and COO, respectively.
The Company expects to conclude its investigation and release its year-end audited financial results shortly. A detailed description of the material findings of the investigation will be set out in the “Directors Report” within the Company’s year-end audited financial results. In the meantime, the trading of the Company's ordinary shares on AIM and trading of the Company's 6.75% convertible bonds due in 2011 on the Channel Islands Stock Exchange remain suspended. The Company will provide a further update in due course.
Jim Jeffs, Chairman, commented:
“Whilst this has been a challenging time for the company, these events have led to no material changes to our outlook or underlying business. Our short-term objective is to ramp up production and become self-sustaining from internally generated cash flow. We are also actively pursuing farm-outs to exploit the Company’s deep portfolio, which the Company believes is amongst the best in the world.
We thank our shareholders, bondholders and employees for their patience and continued support.”