Australia: Jubilant, Tap Oil Settle Permit T-47/P Dispute
- Business & Finance
Jubilant announces settlement of the ongoing arbitration with Tap Oil in connection with Permit T-47/P located in Australian waters. Under the terms of settlement, Jubilant has paid AUD 1.67 million (approximately USD 1.62 million) in full and final settlement against a claim of AUD 3.24 million (approximately USD 3.15 million) towards cash calls raised up to the period of 31st July 2011, related claims, interest and costs.
As part of the settlement the joint venture partners have agreed that participating interests of Tap Oil and Jubilant will become 61.5% and 38.5%, respectively for future expenses, risks and rewards. The joint venture partners have agreed to limit the future expenses at AUD 297,000 (AUD 114,000 net to Jubilant) which is to be funded from the equivalent cash balance already available in the joint venture. These expenses relate to permit maintenance and do not include any drilling costs, which is not contemplated at this time due to the low prospectivity of the Permit.
This arbitration was disclosed in the admission document at the time of the Company’s IPO and appropriate provision covering the entire settlement has already been made in Jubilant’s financial accounts.
In view of the limited prospects of the Permit, the joint venture partners have agreed not to drill further wells or carry out any related activity. Jubilant intends to apply for a Good Standing Agreement to the designated authority at the end of the third permit year, being May 2012.
Ajay Khandelwal, CEO of the Company commented:
“This is a positive development in view of favorable settlement of the arbitration and given the limited prospects of the permit. With closure of this dispute, we can focus more on our key assets.”
Source: Jubliant Energy, August 23, 2011;