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Tullow Oil plc (Tullow Oil) has a considerable shareholder revolt against two of its special resolutions at its AGM on 25 May 2022. The multinational oil and gas exploration company, which recently returned to the FTSE 250 in the FTSE 350 Q1 2022 reshuffle, saw its to allow its directors to allot equity securities or sell ordinary shares held as treasury shares for cash fall short of the 75% investor support required for the special resolution to pass, with 44.0% of shareholder votes cast against. This is a considerable uptick from Tullow Oil’s 2021 AGM, which the same resolution receive 19.0% opposition.

In addition, another special resolution to allow directors to make market purchases of company shares ‘on such terms and in such manner as the Board of Directors of the company may from time to time determine’ managed to scrape through by the narrowest of margins, with 75.6% support—a far cry from the 99.9% of votes cast in favour the year before.

In response to the failed resolution, and the significant opposition to the other, the company noted in its AGM voting results, that it ‘will continue its ongoing dialogue with shareholders and consult as appropriate to fully understand any concerns in relation to these resolutions’.

Although the company has seen a steady recovery in its share price during the past few years, it nevertheless a temporary 25.8% nosedive following the of its 2021 full year results, which reported an 8.8% fall in revenue compared to 2020 to US$1,273m (£1,012.8m) and a loss after tax of US$81m (£64.4m) . It is therefore unsurprising that Tullow Oil’s board ‘ that no interim and final dividend would be paid’ in 2021, which in turn could be a possible reason as to why shareholders took issue with the company’s attempts to be more flexible with its capital.

As opposition against the special resolutions crossed the 20% threshold, both will be logged on the Investment Association’s of shareholder dissent. Moreover, in accordance with provision 4 of the 2018 UK Corporate Governance Code, Tullow Oil will be required to publish an update statement within six months of its 2022 AGM on the views it has received from shareholders as to why they voted against the resolutions, as well as the actions taken by the company (if any) to address the concerns of its shareholders.