Sir Bill Gammell, chief executive of Cairn Energy, became entitled to shares in firm worth £1m-plus in a round of awards to directors worth £5.7m in total.

Edinburgh-headquartered Cairn said 39,232 shares awarded conditionally to Gammell under a long-term incentive programme dating from 2002 had vested, putting him in line for the pay-out.

Gammell and boardroom colleagues have been big beneficiaries of a dramatic increase in the value of Cairn in recent years, which has been driven by a series of finds in India and surging oil prices.

These started with the Mangala discovery in Rajasthan in January 2004, before news of which shares in Cairn were trading at 370p each.

Helped by renewed increases in oil prices shares in Cairn rose 144p to £35.32 yesterday, valuing Gammell's award at £1,388,853 in total. He will receive half of the shares concerned within 30 days of vesting and half within one year.

Following the latest award, Gammell has 416,732 shares worth £14,718,974 in total.

Mike Watts, the exploration director who master-minded Cairn's Indian drilling programme, became entitled to 26,765 shares worth £945,340 in total.

Malcolm Thoms, Cairn's chief operating officer and Phil Tracy, engineering director, became entitled to shares worth £865,057 and £815,857 respectively.

Jann Brown, who became finance director in November 2006, became entitled to shares worth £572,340.

Meanwhile, oil futures gave up early gains and fell sharply yesterday, a move analysts attributed to the expiration of options and to a sharp drop in natural gas prices.

Options let investors bet oil prices will rise or fall in the future. Oil prices can fluctuate widely on days when options expire, analysts said.

Meanwhile, natural gas prices tumbled after the Energy Department said natural gas inventories rose by 93 billion cubic feet last week, more than analysts had expected.

Light, sweet crude for June delivery fell $1.91 to $122.31 a barrel on the New York Mercantile Exchange after rising as high as $126.64.