17th Jan 2020 14:52
(Alliance News) - Oilex Ltd said Friday that further to the settlement agreed with Gujarat State Petroleum Corporation, a preferred bidder has been identified to acquire GSPC's 55% stake in the Cambay production contract.
Oilex shares were up 29% at 0.21 pence in afternoon trade in London.
The Australia-based oil & gas company said the chosen bidder will be invited by GSPC to finalise negotiations before seeking applicable regulatory approvals in India.
In early September, Oilex and GSPC reached a settlement in which GSPC said it would "use its best endeavours to complete the sale process within 90 days from commencement", which had been expected to occur on or about September 24.
The settlement came after a dispute between the two companies which began in May 2018. Oilex issued an event of default notice in May 2018 for the equivalent of USD3.1 million related to GSPC's failure to pay its participating interest in Cambay expenses. When this was not paid, Oilex then requested the transfer of GSPC's interest in Cambay to Oilex.
This dispute went through the courts and in November 2018, GSPC was granted a stay order to delay the event of default notice. As part of the agreement, Gujarat State Petroleum was required to commence arbitration proceedings.
In December 2019, Oilex withdrew the event of default notice and GSPC's arbitration proceedings were terminated.
Oilex still holds a right of refusal to GSPC's 55% interest in Cambay.
By Ife Taiwo; [email protected]
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