Canadian court dismisses lawsuit over stake in Bawean block
Monday, January 2 2006 - 11:17 AM WIB
Publicly listed oil and gas firm PT Medco Energi Internasional said the Court of Queen?s Bench, Calgary, Alberta Province of Canada had recently ordered the dismissal of Indo Pacific Resources (Java) Limited?s (IPR) lawsuit on dilution of its working interest in Bawean PSC offshore Central Java by Camar Resources Canada Inc (CRC).
In November 2004, IPR entered into an Asset Purchase and Sale Agreement with CRC whereby IPR sold 70 percent interest and operatorship of the Bawean PSC to CRC for US$10,500,000.
Under the terms of the agreement, CRC is entitled to dilute as compensation for non payment of IPR?s obligation to refund some amount of money spent by CRC as settlement of IPR?s debts in Bawean block.
For every $150,000 in liabilities that CRC pays, CRC is entitled to get one percentage point of IPR's stake in the block in compensation, according to IPR?s parent company Fortune Oil & Gas Inc.
In statement released Monday, Medco said that CRC had spent amount of money of $3,431,898.91 to settle IPR?s debts in Bawean block. As results, IPR?s interest in the block should be reduced of about 22.88 percent.
Medco also said it expected that settlement in favor of Medco in such court will be obtained by the first quarter of 2006.
Medco through its wholly-owned subsidiary Medco International Ventures Limited (MIV) has supported CRC financially and technically as operator in Bawean block.
According to Medco, MIV is interested and intending to directly participate in Bawean block in the future.
The Bawean PSC consists of two offshore areas which include Camar producing oil and gas field and undeveloped Tuban field.
Since production began on January 2001, the Camar field has produced up to 3,922 barrels of oil per day. The production, however, has been stopped since August 2004 due to the absence of storage tanker at that site. (robert)