27th Mar 2014 12:20
LONDON (Alliance News) - Leni Gas & Oil PLC Thursday said its fraudulent misrepresentation action against Mediterranean Oil & Gas PLC has not been upheld.
The oil and gas exploration and development company said it is making an appeal against the judgement, which was made at 1030 GMT, by the High Court of England and Wales.
Mediterranean Oil & Gas shares were up 28% to 6.57 pence, putting it top of the AIM risers midday Thursday. Leni Gas & Oil shares were down 1.8% to 0.80 pence.
The dispute dates back to July 31, 2012, when Leni Gas & Oil sold 10% of its interest in a Malta prospect license to Mediterranean Gas & Oil. Leni Gas & Oil argues that Mediterranean misled it regarding the potential sale in July 2012.
"To borrow the oil industry terminology," Justice Males said in his judgement: "It may have seemed to LGO that the prospectivity for these proceedings and the amount at stake were such that the economics of this litigation were positive. However, litigation like the oil business is a high risk activity and LGO has failed to strike oil."
Leni Gas & Oil said the decision has potential long-term and broad-reaching implications for all minority joint venture partners in the oil industry, but said it will have no impact on the company's operations, as it moves to increase oil production at its Goudron Field in Trinidad.
Leni Gas & Oil also said it is proud of the stand it took in seeking to protect the interests of its shareholders, but it is disappointed with the outcome of the case.
Mediterranean Oil & Gas said in response that it was no surprise that it won the case, that it was pleased that Leni Gas & Oil's case failed at every stage and was dismissed by the court, stating that it will now take all available steps to recover legal costs from Leni Gas & Oil.
Mediterranean Oil & Gas added that it also will be consulting its solicitors in relation to certain public statements made by individual directors of Leni Gas & Oil during the course of the litigation process.
"As this case is now at an end, I am very much looking forward to spending my time progressing our business and in particular the spudding of the well offshore Malta Area 4," Mediterranean Chief Executive Bill Higgs said in a statement. "I can assure shareholders that the court case has had no impact on operations, and I thank them for their continued support."
By Tom McIvor; [email protected]; @TomMcIvor1
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