Oilex has executed a deed of settlement and release with the Autoridade Nacional Do Petroleo E Minerais (ANPM) over production sharing contract (PSC) in East Timor.
As a result, the ongoing arbitration proceedings arising from the termination of the PSC by the ANPM in 2015 have been discontinued and all claims and counterclaims between the parties are settled.
Joint petroleum development area (JPDA) 06-103 covers an area of 1870km2, and is located in the Flamingo Trough portion of the Northern Bonaparte Basin, Timor Sea.
The execution of the deed sees an amicable conclusion to the arbitration proceedings, where Oilex (10 per cent) and its joint venture partners (Pan Pacific Petroleum 15 per cent, Japan Energy 15 per cent, Gujarat State Petroleum 20 per cent, Bharat Petroleum Resources 20 per cent, Videocon 20 per cent) in the PSC were subject to a penalty claim of $US17 million ($23 million) on a joint and several basis.
Under the terms of the deed, Oilex has committed to a settlement of $US800,000, which is to be paid in the 2021 and 2022 financial years.
In November 2006, Oilex and its joint venture partners entered into a PSC with the designated authority for JPDA 06-103 with an effective date of January 15, 2007.
However, in July 2013 the company, on behalf of the JV, submitted to the ANPM, a request to terminate the PSC by mutual agreement in accordance with its terms and without penalty or claim, which the ANPM issued a notice of termination and demand for payment in 2015.
In addition, the company has entered into an unsecured load facility agreement with two of its joint venture partners which further provides it with the option to extend the settlement payments into the 2023-24 financial year.
Oilex managing director Joe Salomon said it was an “excellent outcome for all parties involved” who has worked over a prolonged period of time to secure this outcome.
“The repayment schedule which is deferred for a significant period is insiders with the lifting of the escrow period of the shares anticipated to be received from the sole of our Cooper Basin assets to Armour Energy,” Salomon said.