PROVIDENCE RES. Providence Resources P.L.C. - Commercial Court Ruling Issued
21 October 2016 - 5:01PM
UK Regulatory
TIDMPVR
COMMERCIAL COURT RULING ISSUED
PROVIDENCE SUCCESSFULLY DEFENDS TRANSOCEAN'S
PART 36 COSTS APPLICATION
Dublin and London - October 21, 2016 - Providence Resources P.l.c. (PVR
LN, PRP ID), the Irish based Oil and Gas Exploration Company (the
"Company"), today provides an update regarding the litigation between
Providence and Transocean Drilling U.K. Limited ("Transocean"), a
subsidiary of Transocean Ltd, relating to the use of the
semi-submersible drilling unit, Arctic III, on the Barryroe oilfield
offshore Ireland (Providence 80%, Lansdowne Oil & Gas plc 20%). A
hearing of Transocean's application in respect of Part 36 of the English
Civil Procedure Rules was heard by Mr Justice Popplewell in the
Commercial Court in London on October 14, 2016. The Commercial Court
handed down its Judgment (the "Judgment") on October 20, 2016.
The Judgment states that, as a result of the decision of the Court of
Appeal in April 2016, Transocean is entitled to its costs of the first
instance proceedings from August 30, 2014 on the Standard Basis (i.e.
approximately 70%) but that the other Part 36 cost consequences in
relation to obtaining costs on the indemnity basis, interest on costs
and the principal sum and the surcharge of GBP75,000 do not apply. In
coming to this conclusion, the judge found that it would be unjust to
apply the full Part 36 costs consequences in the circumstances of this
case, including his previous criticisms of Transocean's conduct which he
said "was not merely unreasonable but dishonest". Based on the Judgment,
Providence will pay Transocean a gross figure of approximately GBP1.10
million (equivalent to approximately $1.35 million) in respect of all
outstanding costs, interest and principal sums, which compares to the
estimated gross figure of $3.90 million described in the Company's
Interim Results. Lansdowne, the Company's joint venture partner in
Barryroe (20% interest), is liable for its share of all costs associated
with the litigation.
Commenting on the announcement, Mr. Tony O'Reilly said:
"This is a very positive result for Providence, with significantly less
cost exposure than had been provided for, justifying our defence of our
position. With this matter now behind us, our focus remains on
unlocking the value within our extensive asset portfolio offshore
Ireland, with a particular emphasis on the farm-out processes for
Barryroe and Spanish Point as well as completing our preparations for
the drilling of Druid next June."
INVESTOR ENQUIRIES
Providence Resources P.l.c. Tel: +353 1 219 4074
Tony O'Reilly, Chief Executive Officer
Cenkos Securities plc Tel: +44 131 220 9771
Neil McDonald / Derrick Lee
J&E Davy Tel: +353 1 679 6363
Anthony Farrell
MEDIA ENQUIRIES Tel: +44 207 250 1446
Powerscourt
Lisa Kavanagh/Peter Ogden
Murray Consultants Tel: +353 1 498 0300
Pauline McAlester
ABOUT PROVIDENCE RESOURCES
Providence Resources is an Irish based Oil and Gas Exploration Company
with a portfolio of appraisal and exploration assets located offshore
Ireland. Providence's shares are quoted on AIM in London and the ESM in
Dublin.
ABOUT THE LITIGATION
Commercial Court Ruling - December 2014
In May 2012, Transocean initiated proceedings against the Company for c.
$19 million. The Company counterclaimed pleading that Transocean was in
breach of contract because their rig and their equipment were not in
good working condition or adequate to conduct the drilling activities
over most of a period from late December 2011 through to early February
2012. In December 2014, a judgment was handed down by the Commercial
Court in London (the "First Instance Judgment") which confirmed the
Company's pleadings that it should not have to pay Transocean for those
periods when the rig was not operable, due to breaches of contract
arising from Transocean's failure to carry out maintenance on safety
critical parts of its sub-sea equipment. The First Instance Judgment
provided that the Company should also be allowed to set-off certain
third party costs against Transocean's claim. Pursuant to the First
Instance Judgment, the Company paid a net amount of c. $6.15 million and
Lansdowne paid c. $1.54 million.
Court of Appeal Ruling - April 2016
Transocean was granted the right to appeal one aspect of the First
Instance Judgment. In April 2016, the Court of Appeal ruled in favour
of Transocean's appeal (the "Appeal Judgment"). The appeal of this one
aspect of the First Instance Judgment turned on the Court of Appeal's
interpretation of the wording of the consequential loss clause in the
rig contract.
By Order of Her Majesty's Court of Appeal of England and Wales in April
2016 (the "EWCA Order"), the Company was ordered to pay Transocean a
gross amount of c. $6.77 million in respect of certain costs claimed by
Transocean in the context of the original legal proceedings issued
against the Company by Transocean in May 2012. The EWCA Order further
stated that the Company was required to pay part of Transocean's legal
costs of the appeal in the sum of gross GBP225,000. As confirmed on
July 20, 2016, the Company discharged the sums owing to Transocean in
respect of the Court of Appeal order. The EWCA Order also stated that
any other matters in dispute between the Company and Transocean in the
legal proceedings would be the subject of a further hearing in the
Commercial Court in London unless otherwise resolved between the
parties. As notified on September 29, 2016, a date of October 14, 2016
was set for this hearing.
Part 36 Matter
The matter considered by the Commercial Court on October 14, 2016 was
whether Transocean was entitled to its legal costs (and interest
thereon) in respect of the First Instance Judgment for the period from
August 30, 2014, on the basis of Transocean having previously made an
offer to the Company to reach a settlement in respect of those
proceedings pursuant to Part 36 of the English Civil Procedure Rules
(the "CPR"). Part 36.14 of the CPR provides that, where judgment
against a defendant (in this case, the Company) is at least as
advantageous as the proposals in the Part 36 offer, the offeror (in this
case, Transocean) would be entitled to its legal costs and interest on
those costs together with interest on the principal sums from the date
upon which the period for acceptance of the offer expired. The Company
had previously estimated that, in the event that Transocean was
successful in the Commercial Court in relation to this matter, an
additional gross payment of c. $3.90 million would be required to be
made to Transocean.
Commercial Court Ruling - October 2016
The judgment of Justice Popplewell on the Part 36 matter was handed down
on October 20, 2016. Based on the Judgment, Providence will pay
Transocean a gross figure of approximately GBP1.10 million (equivalent
to approximately $1.35 million) in respect of all outstanding costs,
interest and principal sums, which compares to the previous estimated
gross figure of $3.90 million outlined in the Company's Interim Results.
Lansdowne, the Company's joint venture partner in Barryroe, is liable
for its (20% interest) share of all costs associated with the
litigation.
Supreme Court Appeal - Pending
The Company has sought leave to appeal the April 2016 Appeal Judgment to
the Supreme Court in the United Kingdom. A decision on the grant of
such leave to appeal is expected to take between nine months and one
year to be reached and further announcements will be made in this regard
in due course.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Providence Resources plc via Globenewswire
http://www.providenceresources.com/html/
(END) Dow Jones Newswires
October 21, 2016 02:01 ET (06:01 GMT)
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