Independent E&P company Panoro Energy has settled a dispute with its joint-venture partners in the OML 113 permit offshore Nigeria related to drilling of new development wells on the Aje field.
Namely, Panoro’s subsidiary, Pan Petroleum Aje Limited (PPAL), has entered into a definitive and binding settlement agreement with other OML 113 joint-venture partners, resolving and settling the longstanding dispute.
The OML 113, which holds the Aje field, is operated by Yinka Folawiyo Petroleum. Other members in the Aje JV are New Age, Energy Equity Resources, Mx Oil, and PPAL. Panoro’s subsidiary holds 6.502% interest in the Aje JV.
On Tuesday, January 2, 2018, Panoro said that all JV partners agreed to halt and withdraw all litigation and arbitration proceedings among the partners.
Also, PPAL will not pay for any Aje-6 well costs that have been incurred by the JV before December 20, 2017, until such time the equipment and parts are to be used in any potential future well operations on or after December 20, 2017.
Furthermore, substantial court costs already awarded to PPAL to be retained and any remaining balances credited in favor of PPAL and PPAL’s $1.5 million cash security deposit, together with all interest – if any, held with UK Courts Funds Office will be returned.
John Hamilton, CEO of Panoro, said: “We are very pleased to have reached this out-of-court settlement agreement. In combination with the interim measures announced in November, this amicable and pragmatic approach finally resolves the longstanding dispute. We believe this outcome is a positive development for Panoro and our Aje JV partners. With this issue behind us, our utmost priority is now to realize the significant potential of the Turonian gas development.”
This agreement is a full and final settlement of claims made in the English and Nigerian litigation proceedings as well as in the arbitration proceedings that began during the dispute. According to Panoro, the Aje JV partners will take all necessary and reasonable procedural steps to terminate the dispute-related proceedings.
Panoro added that the injunction granted to PPAL on December 2, 2016, shall be discharged and PPAL would be entitled to the immediate release of its undertaking regarding the injunction.
Under the agreement, PPAL will pay its share of current cash calls in accordance with the arrangements announced in late 2017. Under the agreement from last November, the partners agreed to a payment moratorium on any past unpaid and uncontested cash calls. Some partners including Panoro had outstanding amounts due which were put under a moratorium.