Providence Resources Eyes $7 Million Payment Following Court Ruling -- Update
13 April 2016 - 11:33PM
Dow Jones News
By Alex MacDonald
LONDON--Ireland-based oil and gas explorer Providence Resources
PLC(PZQA.DB) said Wednesday that it will likely have to pay $7
million to oil and gas drilling company Transocean Ltd. (RIG)
following the conclusion of a U.K. appeals-court ruling.
The ruling stems from a 2012 case in which Transocean alleged
that Providence owed it $19 million for the use of its Arctic III
semi-submersible offshore rig at the Barryroe oilfield in Ireland
between 2011 and 2012.
The court ruled on Wednesday that the "set-off point" for
Transocean's claim, namely that it wasn't appropriately
compensated, has merit. However, the court also upheld a previous
ruling that found that Transocean was ultimately in breach of
failing to maintain various parts of the disputed sub-sea equipment
contract and therefore wasn't entitled to full remuneration.
Providence estimates the financial implications of the Court of
Appeal's judgment will result in a $7 million payment to
Transocean, excluding interest and costs. The parties however are
still determining the final amount.
In the meantime, Providence is in active discussions with
financial advisors and its current debt provider to ensure it has
the appropriate financial resources to meet its obligations to
Transocean.
Lansdowne Oil & Gas PLC (LOGP.LN), which is 18.67% owned by
SeaEnergy PLC (SEA.LN) and has a 20% interest in the Barryroe
Field, said in a separate statement it will need to raise capital
to meet any liabilities that might arise from the court ruling.
The London shares of both Providence Resources and Lansdowne
remained suspended after the ruling, having been halted on
Wednesday in anticipation of the court ruling.
-Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
April 13, 2016 09:18 ET (13:18 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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