LONDON (Alliance News) - Clontarf Energy PLC and Petrel Resources PLC Thursday said they have reached an agreement with the Ghanaian authorities during legal proceedings related to their Tano 2A exploration licence in the country.
The two oil and gas exploration and development companies said they have secured a deal which means that they will be provided new land next to their current acreage to replace lost land when a rival rights application by CAMAC Energy Inc overlapped their own licence.
The company said that all parties involved in the deal seek to expedite the ratification process which requires Cabinet and Parliamentary approval in Ghana, and both Petrel and Clontarf have now ended High Court proceedings.
In April, Petrel Resources and Clontarf Energy PLC were granted an injunction in the High Court of Ghana protecting their rights to the exploration block in shallow water offshore Ghana.
They sought the injunction after discovering that a rival rights application by the US's CAMAC Energy had been ratified, which overlapped with a portion of the rights the two companies believe they have on the block.
Clontarf has a 60% interest in the block and Petrel a 30% interest.
In May, Petrel's Managing Director David Horgan stepped aside from his role to focus on bringing the company's Ghanaian dispute to a successful conclusion.
The news comes after Petrel warned in June that its pretax loss widened slightly in 2013 and its assets in Ireland, Ghana and Iraq all face difficulties.
The company said at the time that little work can be done on its Block 6 oil exploration licence in Iraq currently as it sits in the Anbar province in the west where war has been raging for months. It added that changes to the fiscal regime in Ireland, including royalties and higher taxes could hit its operations in the Atlantic Ocean's Porcupine Basin.
It also warned at the time about the situation in Ghana, noting that impressive development of the oil industry in the country has led to mistakes in the licensing system but it hoped to find a solution to the problem in the near future.
While in Iraq and Ireland Petrel's operations are facing significant risks, Thursday's answer to the Ghanaian licence dispute could be key to the company's operations moving forward.
Clontarf announced separately on Thursday that it will convert its debt from South American lenders into equity by issuing 79.8 million new Clontarf shares at a price of 0.75 pence per share.
Clontarf shares were down 14% to 0.900 pence putting it amongst the top five AIM All-Share fallers, while Petrel shares were up 12% to 9.25 pence, putting it amongst the top five AIM-All Share risers on Thursday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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Petrel Resources (PET)
Clontarf (CLON)