(Sharecast News) - Oilex announced on Friday that it has executed a deed of settlement and release with the Autoridade Nacional Do Petróleo E Minerais (ANPM) in East Timor, to terminate the ongoing arbitration proceedings arising from the termination of the production sharing contract by the ANPM in 2015, and settle all claims and counterclaims between the parties.
The AIM-traded firm said the deed's execution meant an "amicable conclusion" to the proceedings, where Oilex and its joint venture partners in the production sharing contract were subject to a penalty claim of $17m (£13m) plus interest, on a joint and several basis.
Oilex is the operator of the production sharing contract, on behalf of the joint venture.
Under the terms of the deed, Oilex said it committed to a settlement of $0.8m payable in the 2021 and 2022 financial years.
The settlement was fully provided in the company's annual financial statements to 30 June 2019.
In addition, the firm said it had entered into an unsecured loan facility agreement with two of its joint venture partners, further providing it with the option, at its sole discretion, to extend the settlement payments into the 2024 financial year.
"This is an excellent outcome for all parties involved who have worked diligently over a prolonged period to secure this sensible and amicable outcome," said managing director Joe Salomon.
"Furthermore, the repayment schedule which is deferred for a significant period, is consistent with the lifting of the escrow period on the shares anticipated to be received from the sale of our Cooper Basin assets to Armour Energy.
"The company wishes the ANPM the best moving forward, and Oilex can now ensure its attentions are focussed on optimising current opportunities."
At 1304 BST, shares in Oilex were up 17.41% at 0.1p.
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