Mediterranean Oil & Gas (MOG) has today announced that it has received the final payment from Leni Gas & Oil (LGO), following the unsuccessful legal claim brought by LGO against MOG’s subsidiary Malta Oil Pty Limited earlier this year.
On 27 March 2014 the Commercial Court handed down judgment dismissing LGO’s case. On 3 April 2014 the Commercial Court ordered LGO to pay MOG’s legal costs on an indemnity basis, with the sum to be assessed by the court if not agreed. On 10 April 2014 LGO paid £600,000 on account of costs by an order of the court.
MOG and LGO have reached an agreement as to the total legal cost (the “Legal Cost”) for which LGO is liable. The agreed Legal Cost is £1.2 million.
MOG has said today that that LGO yesterday paid £616,437.50, which is the Legal Cost less the amount paid on account, plus interest of £16,437.50 (at an interest rate of 8% per annum). This means that the issue of legal costs is now finally resolved and there remain no further issues or steps to be taken in the legal proceedings.
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 took legal action against MOG and 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.
Leni then took legal action, but the court found that the company’s case failed.