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James Weir - Mon, 12 Oct 2015 NRG Drilling says it has been “stonewalled” for three years over a legal claim for several million dollars against Kea Petroleum. Kea's New Zealand business was placed in voluntary liquidation last week, and the pending legal action was a catalyst in that decision. Liquidator David Vance said the legal action was “disputed” with counter claims lodged by Kea. But the huge advances - $65 million - owed to Kea’s British parent, meant there would be no funds left to pay-out if the company did lose the case. The case was set down for a hearing at the High Court in Wellington on November 2. NRG Drilling director Stacey Radford said the legal action related to the drilling of the Douglas-1 well in Taranaki in 2012 and the company's expectation that that work would be followed by the Mauku well. NRG had spent a “huge amount” setting up for both wells and their legal claim against Kea involved “several million dollars", Radford said. “If they had come back and settled for what it cost us, we could have just moved on,” he said. “They have gone into liquidation to save themselves the embarrassment of court proceedings,” Radford said. Timeline The Douglas-1 well in central Taranaki was drilled by NRG in 2012, using the NRG Rover rig on the project in PEP 51153. London-listed Kea brought forward drilling at Douglas after delays getting access and consents for the larger Mauku project on the coast south of Kawhia in PEP 381204. The Douglas well was later suspended. Find out more... Factfile information Organisation Kea Petroleum Resource PEP 51153 (Puka) PEP 381204 (Felix, Mangatoa) Rover NRG’s involvement in Mauku was initially delayed for several months, with drilling equipment left in the yard. And when Kea finally decided to drill Mauku, instead of NRG, Kea used Iceland Drilling’s Odinn rig to re-enter the well and took it to a total measured depth of 3,220 metres. Mauku was abandoned after it failed to intersect any hydrocarbon pay. The well had also taken twice as long to drill as Kea had expected, according to Radford. “It was one disaster after another,” Radford said. Complaint To get out of the contract for NRG to drill Mauku, Radford claimed that Kea “concocted" a complaint to the High Hazards Unit in New Plymouth against the NRG rig. That was investigated and NRG was cleared, Radford said. Radford said the liquidation of Kea was not a surprise given the company was desperately short of cash, and raised money from investors while the NRG legal action was pending. “If you were a shareholder you would be pretty ****ed off,” Radford said. “And as a drilling contractor you would be more than disappointed in the way they have conducted themselves,” Radford said. “When you have signed a contract to drill some well
Down Under it looks like he is liquidating his assets fast, and the Australian Tax Office is breathing a bit close to his neck
So it's job well done, then?
Under NZ tax law, the tax losses have already been wiped, when it changed to an investment company. Unless the business continues its field of activity, ie oil and gas exploration, the tax losses disappear.
You can forget the tax losses. They will be gone.We are in to the last hour for sending in proxies now, and I expect IRGS and his henchman Lees, despite only having 1/6 of the shares, will carry the day due to general shareholder disillusionment and apathy. But you never know, perhaps some other substantial shareholder will stand up at the SGM and say he will top the deal. Which we are all agreed is truly dreadful. Yes I agree, they had better deals or could easily have got them. But these b***ards did not want that.
That's what pre emotive right is all about. The right of an existing partner to match any deal offered by an outside third party, and take the deal for itself. Standard in many lines of business, not just oil exploration
Given that MEO have the right to match this deal, why should they offer anything better?
You are not liable for the company's debts You.can do an off market transfer -if you can find a buyer
Two years ago, this share was 10p. Then it dropped to 1p, and then there was the 10:1 rollback, and soon after the new shares had dropped again to 1p. Then along comes this proposal, which would drop the new shares to 0.1p. So the shares are worth 1/1000 'th of their value 2 years ago. A proud record indeed for IGRS. I guess he might now drop in a half mill at 0.1p to end up with 50% of the ongoing company, with all other existing shareholders effectively diluted right out.
So now you have your answer. Since there is a planned call on shareholders to raise funds, the company's value is essentially negative
Somewhere between not much and very little. Don't expect a deal to be settled much before end of year
In a fire sale it takes time for buyers to check the fire damage on the goods
I guess the $1 million pledged was from IRGS and his mates to get the ball rolling. It didn't work, so they risked nothing
So it's essentially a private company now. Is that the flap of vultures' wings I can hear overhead?
That's a bit hard, Rongo. The reason there have been no more Waihapa wells is because the field is basically produced out - the trap has been drained. Also, I think you are over the top on cost. A Shannon wellc oudl probablt be drilled for under fivwe million pounds
You got it right there, Da Gee C'mon IRGS, put your money where your mouth is.
Your point is well made, but I think the well should be able to be drilled for a lot less than the £7.5M you are suggesting. I would put it in the £ 4-5M range. After expenses, and subtracting their ongoing overheads for the next year, this does not leave sufficient to fund 70% of the well, assuming MEO stumps up their 30%. So my overall conclusion is the same as yours. They will need to farm out to drill Shannon, ie exactly the position they have been in ever since Puka-3. Desperate last throw of the dice, with no guarantee of success in raising £3 M.
Alas, the latter I fear
Adrift in an ocean of blue. Lost and foundering. Never could find the oars