9th Sep 2019 11:24
(Alliance News) - Shares in Oilex Ltd more than doubled on Monday as it was announced it has resolved a dispute with joint venture partner Gujarat State Petroleum Corp.
Shares in the company were trading at 0.26 pence in London in morning trade, having last closed at 0.13p.
Oilex and GSPC have been at loggerheads over their Cambay joint venture, but the two companies have now agreed to include GSPC's participating interest in Cambay in a larger asset sale.
GSPC has further agreed "to use its best endeavours to complete the sale process within 90 days from commencement, which is anticipated to occur on or about September 24."
Oilex has first right of refusal to GSPC's 55% interest in Cambay.
Previously, Oilex had declared an event of default on the Cambay joint operating agreement, but has withdrawn this. GSPC will also terminate the arbitration proceedings with Oilex and remove the stay order it was granted by the High Court of Gujurat.
The event of default notice was issued back in May 2018 and was for the equivalent of USD3.1 million and 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 a default notice. As part of the agreement, GSPC was required to commence arbitration proceedings.
Oilex Chief Financial Officer Mark Bolton said: "We are pleased to support GSPC's initiatives to restructure its business and provide a path forward to potential development of Cambay with a potential new joint venture partner. The resolution of this dispute reflects the valued contribution of the [Directorate General of Hydrocarbons] and the [Ministry of Petroleum & Natural Gas] in their efforts to promote investment in the sector. Oilex is committed to meeting its undertakings to the [Government of India] and contributing to India's energy security."
Related Shares:
OEX.L