3rd Mar 2015 16:47
LONDON (Alliance News) - President Energy PLC Tuesday said it was not informed about court action allegedly taken by its partner on the Pirity concession in Paraguay, Petro-Victory Energy Corp, which on Monday said it had sent a letter to President Energy about cash demands from President.
In a statement released by Petro-Victory, which holds a 36% interest in the Pirity concession, said it had "delivered a notice of audit to President for the years 2013 and 2014 amidst concerns over the alleged continuing cash demands from the operator in excess of the approved work programme and budget," it said.
Further, Petro-Victory said President is responsible for "over-expenditures and inadequate logging and well testing" on the concession.
As a result, Petro-Victory will seek injunctive relief barring President from some actions relating to the concession, including prohibiting the President's ability to enter into any contracts or agreements relating to the concession.
On Tuesday afternoon, President said it had not been given any notice of court action taken by Petro-Victory.
"The management of President strongly believe that any claims made by Petro-Victory are without foundation, and that Petro-Victory continues to be in default under the relevant joint operating agreement, having failed to pay its proper contribution to the work programme currently amounting to USD1.8 million," President Energy said in a statement.
As it said Petro-Victory has defaulted under the agreement, President believes it has the right to acquire Petro-Victory's interest in the concession at a discounted value as per the terms of the agreement.
"Whilst President will, in a measured and professional manner, take all necessary legal steps to both protect its interests and resolve the matter expeditiously, this does not impact on President's strategic initiatives and upcoming work programme in Paraguay where the current focus is on the prospective Hernandarias concession in which Petro-Victory has no interest," it said.
President Energy shares closed down 8.1% to 12.75 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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