12th Nov 2015 09:07
LONDON (Alliance News) - SacOil Holdings Ltd Thursday said one of its former partners in Nigeria has initiated court proceedings against the company over a dispute over the farm-out agreement signed by the two companies, as SacOil fights to recover over USD12.0 million it claims to be owed.
SacOil shares were up 40% to 1.58 pence per share on Thursday morning.
SacOil and Transnational Corporation of Nigeria PLC were joint venture partners working to develop the OPL281 licence, an onshore oil block situated in Delta State in Nigeria.
However, SacOil said it would no longer participate in the licence as it tried to rebalance and rationalise its portfolio, pulling out of the licence altogether and terminating the agreement it signed with Transnational Corp.
SacOil said it received a letter from Transnational Corp back in December 2014 accepting SacOil was pulling out of the licence, and claims Transnational Corp also acknowledged it would refund the farm-in fees paid by SacOil.
SacOil said, at that time, the only dispute between the two companies was how much interest Tansnational Corp would pay SacOil on top of the farm-in fee.
SacOil paid USD12.5 million towards farm-in fees back in 2011, and said "contractually [those fees] are to be refunded with interest" by Transnational Corp.
Despite SacOil receiving written confirmation from Transnational Corp confirming it would refund those fees, SacOil said it was notified in June that Transnational Corp had initiated court proceedings against SacOil because it believed SacOil's decision to pull out of the farm-out and participation agreement signed between the two companies was "wrongful and amounted to repudiation" of the agreement.
Both SacOil and Transnational Corp released press releases back in April this year confirming that SacOil had pulled out of the licence. At that time, Transnational Corp did not mention any dispute between the two companies, and said SacOil's withdrawal would have no impact on the funding for the licence.
Transnational Corp is now seeking damages from SacOil and is refusing to repay the USD12.5 million in farm-in fees paid by SacOil, plus interest that SacOil claims it is owed.
"SacOil is opposing these proceedings and has engaged counsel to recover all monies due and payable pursuant to the farm-out and participation agreement," said SacOil Thursday.
In retaliation, SacOil filed a notice for arbitration toward the end of August with the Nigerian Chartered Institute of Arbitrators to try and recover its fees plus interest.
"The SacOil board and management remain committed to recovering from Transcorp all amounts owed and to institute the requisite legal actions accordingly," said SacOil.
It did not provide any details about the legal proceedings.
By Joshua Warner; [email protected]; @JoshAlliance
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