(Alliance News) - Oilex Ltd on Monday said it is in "advanced discussions" to buy Gujarat State Petroleum Corp's 55% interest in the Cambay oil field in India.
The Australian oil & gas exploration and production company said it also is in advanced discussions with third parties to provide finance and working capital if the acquisition is completed.
As a result of the companies being in advanced discussions, Oilex has requested an immediate trading halt on the Australian Stock Exchange until an announcement regarding the acquisition is released. The stock had tripled in Sydney on Monday to AUD0.0030 before trading was stopped.
Trading has continued on AIM in London, and Oilex shares were up 50% at 0.14 pence Monday. The stock was trading at 0.060p back in October.
Oilex announced in September 2019 it had reached a settlement with GSPC regarding the acquisition, in which it said at the time it would "use its best endeavours to complete the sale process within 90 days from commencement", which was expected to occur that month.
The settlement came after a dispute between the two companies that began in May 2018. Oilex issued an event of default notice that month for the equivalent of USD3.1 million 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 in India and in November 2018, GSPC was granted a stay order to delay the event of default notice. As part of the agreement, GSPC was required to commence arbitration proceedings. A month later, Oilex withdrew the event of default notice and GSPC's arbitration proceedings were terminated.
"While the execution of the agreement has been delayed by the impact of Covid-19 pandemic, we have continued to work together to bring this matter to completion," said Oilex, adding that discussions have not reached completion and there can be no certainty that any agreement will be reached.
By Zoe Wickens; zoewickens@alliancenews.com
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