Leni pays for going to court with MOG

“LGO pursued a “weak and thin” case involving serious allegations of fraud and dishonesty “to the bitter end” which required a full forensic enquiry and led to increased legal costs.“LGO courted publicity during the legal proceedings in a way that was intended to raise the profile of the case.”

The award of legal costs on an indemnity basis means that MOG expects to recover substantially all of its legal costs and certainly “a much higher proportion than if it had been awarded costs on the usual ‘standard’ basis. “

It is expected to take some weeks for the final amount payable by LGO to be agreed or assessed, and MOG will keep shareholders informed of developments, the company said.

Background

Leni Gas & Oil (LGO), in July, 2012, sold its 10% share in the Malta Area 4 to MOG for 1$ for the interest plus $20,000 for its residual costs arising under the Joint Operating Agreement between the Parties associated with the acquisition of 3D seismic data in 2011.

Only weeks after the transaction, MOG entered into farm-in agreements with Genel Energy Plc, led by ex-BP CEO Tony Hayward, for a $10 million cash consideration and two well commitment on the offshore Malta Area 4 PSC.

LGO has taken legal action against MOG and has, since the farm-in deal, claimed it was tricked by MOG into selling its 10% share.

To remind, after buying Leni’s 10% interest in the PSC through its subsidiary Phoenicia Energy Company Limited (“PECL”) , MOG sold a 75% working interest in Phoenicia to Genel.

“Leni would not have sold its interest for $1 plus liabilities had it been aware of interest from Genel Energy or other potential farm-in partners,” Leni said in a statement last year.