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For Immediate Release (Embargoed until Advised by LGO circa tomorrow noon)
3 January 2013
LENI GAS AND OIL PLC
("LGO" or the "Company")
Legal Proceedings commenced against Mediterranean Oil and Gas
LGO today announces that, further to its statements of 3 and 4 September 2012, it has today issued proceedings against Mediterranean Oil and Gas Plc ("MOG") in the High Court of England and Wales in regard to the Company's 31 July 2012 sale of its 10% interest in Malta Area 4 PSC to MOG.
LGO's Chief Executive, Neil Ritsonsaid: "We have repeatedly asked MOG to answer simple questions explaining the facts at the time the Company agreed to sell its interest and since we have not had what we regard as satisfactory answers, LGO's board has found itself with no option but to seek relief through the Courts."
David Lenigas, the Company's Chairmancommented: "The Company's strong view is that it was misled by MOG at the time LGO sold its 10% interest on 31 July 2012. As MOG won't confirm the facts, we will now let the Court decide on the matter."
Notes to editors:
On 1 August 2012 LGO announced thatLeni Gas and Oil Investments Limited ("LGOI"), a subsidiary of LGO, had agreed to sell its interest in the Malta Area 4Production Sharing Contract ("PSC")(the "Interest") to Phoenicia Energy Company Limited ("PECL"), a subsidiary of MOG.
PECL agreed to pay LGOI a consideration of USD1 for the Interest with an effective date of 1 January, 2012. In addition, PECL will assume liability for LGOI's residual costs arising under the Joint Operating Agreement between the Parties associated with the acquisition of 3D seismic data in 2011 estimated to be of the order of USD20,000 for the to end-2011.
Subsequently MOG announced on 23 August 2012 that its wholly owned subsidiary, PECL, had entered into a conditional farm-out agreement with Genel Energy Plc ("Genel"), in relation to PECL's 100% interest in Area 4 Offshore Malta; only 23 days after LGO agreed to sell its working interest to MOG for US$1.
MOG also announced on 21 December 2012 that it had signed the two key contracts with Genel that enable Genel's acquisition of a 75% working interest in MOG's wholly owned subsidiary, PECL. This follows the Government of Malta granting a one year extension to January 2014 of the first exploration phase of the PSC for Malta Offshore Area 4. MOG listed these agreements as:
1: Share Sale Agreement
The Share Sale Agreement will result in Genel acquiring 75% of the issued share capital of PECL on completion of the transaction for the following consideration:
US$10 million cash payment;
100% carry on the first exploration well, and a 100% carry on the second exploration well up to US$30 million gross expenditure;
At MOG's option, should the costs of the second well exceed US$30 million, Genel will provide a financing arrangement to fund MOG's 25% share of any additional expenditure, at an interest rate equivalent to 3 Month Libor plus 400 bps.
MOG will remain operator via an Operations Service Agreement with PECL until completion of the first exploration well, at which time Genel can elect to become the operator, or at such later date as the parties may agree.
2: Shareholders' Agreement
The Shareholders' Agreement, also entered into today, governs the operation of PECL in relation to its execution of the PSC and the rights and obligations of the shareholders.
Enquiries:
Leni Gas & Oil plc
David Lenigas Neil Ritson | +44 (0)20 7440 0645 |
Beaumont Cornish Limited
Nomad and Joint Broker Rosalind Hill Abrahams Roland Cornish | +44(0) 20 7628 3396 |
Old Park Lane Capital Plc
Joint Broker Michael Parnes Luca Tenuta | +44(0) 20 7493 8188 |
Shore Capital
Joint Broker +44 (0) 20 7408 4090
Pascal Keane
Jerry Keen (Corporate Broking)
Pelham Bell Pottinger
Financial PR Mark Antelme | +44 (0) 20 7861 3232 |
Henry Lerwill |
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