The Independent: Cairn Energy yields £11m fortune for Gammell

By Saeed Shah

07 April 2004

Bill Gammell, the chief executive of Cairn Energy, is sitting on a paper fortune of £11m, following the company's spectacular oil find in India.

Cairn's shares have rocketed up since January when it announced a major discovery in India, increasing the value of the share options held by directors. Although Mr Gammell, 51, has gained the most, many of the executive directors are now paper millionaires.

The company's shares have more than doubled since January, closing yesterday at 887p. According to the company's annual report, published yesterday, Mr Gammell's share options, under a scheme now abandoned, are in the money to the tune of £1.43m.

He has 55,000 shares granted in 1994 with an exercise price of 78p. In addition, he was 150,000 granted at 234p in 1996.

As well as the £1.43m paper profit that can be taken immediately on these share options, Mr Gammell has awards under a newer Long Term Incentive Plan (LTIP) that are worth an additional £9.63m at yesterday's closing shareprice.

A more up-to-date statement on the LTIP scheme than that provided in the annual report was made by the company in an announcement in March. That showed Mr Gammell had 1,085,069 shares, including 205,069 that had already vested, under the LTIP.

The LTIP's are free shares, which do not have to be purchased by the director but are awarded when certain performance criteria are met. The group general manager, Malcolm Thoms, has 385,907 shares under the LTIP, 125,907 of which have vested, worth a total of £3.4m at yesterday's shareprice.

The news on Cairn's dis- covery has proved a severe embarrassment for Shell. Cairn paid Shell just £4m for the Rajasthan field, where it made the discovery, less than two years ago.

Cairn has said the field should produce 10,000 barrels of oil a day.

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