The Oil Search Ltd (ASX: OSH) share price is heading south today following the immediate departure of the company's managing director.
At the time of writing, the energy producer's shares are down 4.39% to $3.70.
Image source: Getty Images
What happened?
Investors are heading for the hills, selling Oil Search shares after the company released its latest statement to the ASX.
According to the announcement, Oil Search advised that its managing director, Dr Keiran Wulff has resigned with immediate effect. The sudden departure comes as Dr Wulff has reportedly been suffering from a long-term health condition, which has recently deteriorated.
However, the most concerning aspect of the release appeared to be that there were concerns about Dr Wulff's behaviour. Apparently, the company's managing director behaved in a manner that was not consistent with the standards expected by the board. In particular, this is in relation to Dr Wulff's management style as reported by management.
Having served as managing director since February 2020, Dr Wulff will be replaced by chief financial officer Peter Fredricson. A veteran energy sector resource executive, Mr Fredricson will assume the acting CEO role effective immediately.
The company will begin a search for a permanent managing director/CEO in the near future, considering both internal and external candidates.
Oil Search chair, Rick Lee said that he "looked forward to working with Mr Fredricson to ensure that production projects in Papua New Guinea and development initiatives in both PNG and Alaska remained on track and on budget."
The company is currently planning to expand liquefied natural gas (LNG) operations in Papua New Guinea. In addition, Oil Search is hoping to sell a slice of its US$3 billion oil project in Alaska.
Mr Lee also commented on the company's headwinds, and recovery efforts, adding:
This period has been marked by extreme challenges including global lockdowns associated with the COVID-19 pandemic, a plunge in oil prices, crisis measures to protect the Company's financial position and developing a clear strategy to steer a path to a sustainable future through the energy transition.
It is a tribute to all staff that Oil Search is now in a solid position with record levels of production in PNG, a strengthened balance sheet and our Alaskan development plans meeting milestone targets.
About the Oil Search share price
Over the past year, Oil Search shares have gained more than 20%, reflecting overall positive investor sentiment within the industry. The energy sector is up around 8% since this time last year.
Oil Search shares command a market capitalisation of roughly $7.7 billion, with approximately 2 billion shares on its books.
