LONDON (Alliance News) - Providence Resources PLC said Wednesday the Court of Appeal had ruled in favour of Transocean Drilling UK Ltd, finding Providence was not entitled to set off certain spread costs against Transocean's claim.
Providence will now have to make a payment of around USD7.0 million to Transocean, based on Providence's estimate.
In December 2014, the Commercial Court in London ruled against Transocean in its claim for USD19.0 million in costs for using a semi-submersible drilling unit on Providence's Barryroe oilfield, offshore Ireland in 2011-12. Providence had counter claimed, saying it shouldn't have to pay that amount when the rig wasn't fully fit for purpose.
A judge at the Commercial Court in London ruled that Transocean wasn't due the amount it had claimed because it was in breach of contract for failing to maintain various parts of its sub-sea equipment. It also supported Providence's position that Providence was entitled to set off certain spread costs against Transocean's claim, and it was this aspect of the claim that Transocean appealed.
The Court of Appeal on Wednesday granted Transocean's appeal, but said all other aspects of the judgement remain in force, including the finding that Transocean was in breach of contract.
Shares in both Providence and Lansdowne Oil & Gas PLC were suspended on Wednesday morning, before the outcome of the appeal was given.
Lansdowne owns a 20% stake in the Barryroe field, and said it will need to raise capital to meet any liabilities arising from the court ruling. As a result, it said it has requested the continued suspension of its shares pending clarification of its financial position.
Lansdowne said it is in active discussions with financial advisors and a current debt provider to ensure that it has the appropriate financial resources to satisfy its obligations under the Barryroe Joint Venture Agreement.
SeaEnergy PLC noted the Lansdowne announcement as it holds a 19% stake in Lansdowne.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance. Updated by Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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