LONDON (Alliance News) - London-listed, US-focused oil development and production company Nighthawk Energy PLC said Tuesday a claim has been removed from its on-going litigation with Running Foxes Petroleum Inc.
The claim removed was for breach of contract. With regards to the second claim, Running Foxes' claim for breach of implied covenant of good faith and fair dealing, the US District Court for Colorado intends to enter judgement in favour of Nighthawk Energy, it said.
However, the court has granted Running Foxes another 21 days to provide further evidence.
One further claim is in place under the litigation, in relation to Running Foxes' claim of an overriding royalty interest on a lease. Nighthawk said it continues to believe the plaintiff has "no reasonable claim" and plans to "continue to defence the claim vigorously".
Nighthawk said it will make further information available at the "appropriate time".
Nighthawk has been somewhat vague in its releases concerning the litigation with Running Foxes. The first release made by the London-listed company concerning the matter was on May 21, 2014, when it noted articles made on certain websites, which were not named, regarding the lawsuit.
Well-known investment blogger Tom Winnifrith, who runs the website Shareprophets, back in 2014 highlighted that Nighthawk had failed to release news of the litigation and claimed to be the aforementioned website that had broken the story that prompted Nighthawk to publish its announcement.
Nighthawk was adamant at the time that the case was "completely without merit", calling the allegations "baseless" and the complaint a "frivolous, groundless and vexatious action".
However, it didn't outline the actual allegations being made nor the complaint issued by Running Foxes, stating that the "facts and governing law do not give rise to any valid legal claim" that raises a business issue that needs to be resolved.
It had also stated that the claim was "financially immaterial" to the company's production, revenue and profitability.
Nighthawk was unavailable for comment on Tuesday.
Running Foxes was previously Nighthawk's partner on the Jolly Ranch project in Colorado, which also incorporated the Smoky Hill project.
Running Foxes had been the operator of the project before Nighthawk entered the project. On Nighthawk's website, the company says that the 19 wells that were historically drilled by Running Foxes all encountered multiple pay horizons but were "completed in a manner that did not establish sufficient oil production".
Nighthawk became the sole owner of the Jolly Ranch and Smoky Hill projects back in July 2013, when it purchased Running Foxes' 25% stake for USD12.0 million in cash.
Nighthawk has since broken up the Jolly Ranch and Smoky Hill projects into separate operations, with both projects mainly located within Lincoln Country, with Jolly Ranch extending into the Elbert region, whilst Smoky Hill overlaps the Washington area.
Shareprophet's Winnifrith reported back in 2014 that Steve Todesco, the president of Running Foxes, had claimed the litigation was chasing "several million dollars" from Nighthawk, as the blogger published the court papers.
Those court papers said Running Foxes was claiming "damages, attorney fees, and costs" against Nighthawk because the London-listed company was in "violation of its contractual and common law duties," claiming Nighthawk had agreed to pay Running Foxes with working interests and overriding royalty interests in the Jolly Ranch project.
The court papers claimed that Nighthawk had "failed to make payments to Running Foxes attributable to such interests."
Shares in Nighthawk Energy were down 1.2% to 1.26 pence on Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews. Updated by Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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