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The Guardian: Exploration firm suspends two executives

Terry Macalister and Graeme Wearden
Friday September 7, 2007

Max Petroleum, a small UK oil and gas exploration firm that became a darling of the London stock market, has suspended its two top executives and started a wide-ranging investigation into their share option dealings and other issues.

The Aim-listed company said yesterday that chief executive Steve Kappelle and chief operating officer Ole Udsen were removed from their posts “pending an investigation into potential breaches of their employment contracts involving the undisclosed receipt of share options.” It added: “The scope of the investigation, however, will not be limited to these matters.”

Trading in the shares, which as recently as July had reached a high of 207p but have since crashed to half that level, was halted yesterday amid concerns in the City that the group could represent another Regal Petroleum. That company burst a wider bubble around speculative stocks when it produced water rather than oil from a much-hyped well in the Mediterranean.

Max Petroleum is searching for oil and gas in Kazakhstan and had reached a stock market value of £670m this summer despite producing a tiny amount of oil – 1,800 barrels a day. “Obviously there’s some uncertainty around the company following today’s announcement, and it was felt that trading should be suspended until it is resolved,” Michael Young, the company’s chief financial officer, said. He addeds that the inquiry should not have any impact on Max Petroleum’s exploration licences or its normal activities.

Mr Kappelle, who once worked for Shell in Dubai, is based in London, and Mr Udsen, who worked for Maersk oil and gas of Denmark, works at offices in Almaty, Kazakhstan, for Max which floated in October 2005.

The moves came as the Kazakh prime minister, Karim Massimov, invited Paulo Scaroni, the chief executive of Italian oil company Eni, to come to Almaty to discuss a row over the huge Kashagan gas field. Work has been suspended on the scheme run by Eni with a variety of other foreign partners, including Shell, on the demands of the Kazakh authorities which claim there are environmental problems, huge cost overruns and delays.,,2164197,00.html and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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