Pancontinental contests Tullow’s Namibian license cash call
Pancontinental Namibia has received a cash call claim for more than $0.5 million from Tullow Oil. The claim stems from alleged costs incurred by Tullow during operatorship of Namibian license PEL 37.
Pancontinental said on Monday that it received a purported cash call from Tullow on Friday, December 16.
The amount of the cash call, standing at $552,897, Tullow claims to represent 35 percent of operatorship costs allegedly incurred by the company in 2014, 2015 and 2016 calendar years.
Namely, the costs are regarding common exploration costs, exploration license management, Tullow’s local office costs, and non-project general exploration.
The company said that the claim by Tullow was made based on an adjustment to the joint venture accounts resulting from an internal review of costs incurred since 2014. Thus, Tullow believes it gives the company the right to issue the cash call.
“This claimed adjustment was made without any prior consultation with Pancontinental,” the company said.
Furthermore, Pancontinental stated it would be seeking full and complete details from Tullow regarding the issue.
As things stand, Pancontinental is of the view that the items, if accurate, are covered by the free carry as defined in the Tullow Farmout Agreement dated September 6, 2013, and sees the cash call as invalid.
Namibian license PEL 37 4 best estimate has the potential for combined prospective resources of more than 900 million barrels of oil recoverable. Tullow is the operator of the license, with a drilling campaign required to begin by March 27, 2017.
PEL 37 covers three adjacent blocks over some 17,000 sq km in the blocks in the central Walvis Basin offshore Namibia.
To remind, Canadian oil and gas exploration company Africa Energy entered into a farm-out agreement with a subsidiary of Pancontinental Oil & Gas at the end of November for the acquisition of a 10 percent participating interest in the PEL 37 license.
Offshore Energy Today Staff