Last checked at 13 Apr 2016 12:21
Lansdowne Oil & Gas plc
Court of Appeal Ruling
13 April 2016
Lansdowne Oil & Gas ("Lansdowne" or "the Company"), the independent oil and gas company focussed on offshore Ireland, notes Providence Resources release today regarding the Court of Appeal Ruling which stated:
"Providence Resources provides notification regarding the litigation between Providence and Transocean Drilling U.K. Limited ("Transocean"), a subsidiary of Transocean Ltd.
The case relates to certain costs claimed by Transocean against Providence regarding the use of the semi-submersible drilling unit, the Arctic III, in 2011/12 on Providence's Barryroe oilfield, offshore Ireland. The total claim, which was made by Transocean in 2012, amounted to approximately US$19 million. Providence, in defence of its position, counterclaimed against Transocean. The Hon. Mr Justice Popplewell, in his judgment of 19 December 2014 in the Commercial Court in London, found that Transocean was in breach of contract for failing to maintain various parts of its sub-sea equipment and that Transocean was not, therefore, entitled to certain amounts reflecting Transocean's own day rate remuneration.
As previously disclosed, Transocean sought and was granted the right to appeal one aspect of Mr Justice Popplewell's judgment, which specifically related to whether Providence was entitled to set off certain spread costs against Transocean's claim. The appeal of this aspect of the judgment turned on the Court of Appeal's interpretation of the wording of the consequential loss clause in the rig contract (Mr. Justice Popplewell had found that Providence was entitled to set off certain spread costs). The appeal was heard in March 2016.
In a judgment handed down today, 13 April 2016, the Court of Appeal has granted Transocean's appeal on the set off point. All other aspects of Mr Justice Popplewell's judgment remain in force, including the finding that Transocean was in breach of contract.
Providence estimates the financial implications of the Court of Appeal's judgment will result in the payment of approximately US$7 million (excluding interest and costs) to Transocean. The parties and their legal advisors are currently in the process of agreeing the final amount payable to Transocean (together with any costs and interest thereon) and the terms of payment. Accordingly, at this time the Company cannot confirm the final amount payable to Transocean, nor the terms or timing of such payment. "
Lansdowne, through its 20% interest in the Barryroe Field, will need to raise capital to meet any liabilities arising from the court ruling and for its on-going working capital requirements. As a result, the Company has requested the continued suspension of its shares from trading on AIM pending clarification of the Company's financial position. In the meantime, the Company is in active discussions with its financial advisors and current debt provider with the objective of ensuring that the Company has the appropriate financial resources to satisfy its obligations under the Barryroe Joint Venture Agreement and meet its on-going working capital requirements.
On the basis of this issued judgment, Lansdowne will now make a provision for its net amount in its Financial Accounts for the year ending 31 December 2015.
Further updates will be issued in due course.
For further information please contact:
Lansdowne Oil & Gas plc Steve Boldy Richard Slape | +353 1 495 9259 |
Cantor Fitzgerald Europe Sarah Wharry David Porter |
+44 (0) 20 7894 7000 |
Notes to editors:
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focussed, oil and gas exploration and appraisal company quoted on the AIM market and head quartered in Dublin.Lansdowne holds extensive acreage in the North Celtic Sea Basin, including a 20% stake in Exploration Licence SEL1/11 which contains the Barryroe oil field.
For more information on Lansdowne, please refer to www.lansdowneoilandgas.com
ABOUT BARRYROE
Barryroe, located in the North Celtic Sea Basin, off the south coast of Ireland, has had six wells successfully drilled on the structure. Hydrocarbons have been logged in all six wells, with flow test results from four wells. Four wells were drilled in the 1970's by Esso with a further appraisal well drilled in 1990 by Marathon Oil. The sixth well was drilled by Providence in 2011/12. The oil is light (43o API) with a wax content of c. 17-20%. The successfully tested reservoir sands are of Cretaceous Middle and Lower Wealden age located between c. 4,500' TVDSS and 7,550' TVDSS. The field is covered by both 2D and 3D seismic, the latter which was acquired in 2011.
Audited (NSAI/RPS) on block resources amount to 1.048 billion barrels in place, with an estimated P50 recoverable resources of 311 MMBO (plus associated gas). A further 778 MMBO barrels in place have been identified in incremental sands, though these sands have yet to be tested.