Afren Plc settled a dispute with its former chief executive officer and chief operating officer who were fired after receiving payments without board approval.
The UK oil and gas explorer secured $17.1million from former CEO Osman Shahenshah and COO Shahid Ullah, recovered $3million in legal costs and agreed not to pursue the matter in court, it said today in a statement.
The stock climbed as much as 9.9%, the biggest gain since Dec. 22, when the company said it received an approach on a possible takeover by Nigeria’s Seplat Petroleum Development Co. Afren fell 1.9% to 46.38 pence by 10.41am in London. Seplat has until Jan. 19 to make a firm offer.
Afren fired Shahenshah and Ullah for “gross misconduct” in October after an investigation into unauthorized payments, including a review of three transactions between the explorer and partners in 2012 and 2013. Afren suspended the executives at the end of July.
“While we continue to disagree with the company’s assessment of the issue, we are pleased that this matter is behind them and that they can move forward with their careers,” Ryan Junck, a partner at Skadden, Arps, Slate, Meagher & Flom, representing the executives, said in an e-mailed statement.
Seplat, which listed on London and Nigeria’s stock exchanges in April, has onshore licenses with oil production of 60,000 barrels a day, according to its website. Afren expects to produce up to 36,000 barrels of oil a day in 2014, mainly from Nigeria, it said in November.