The joint venture partners in Aje oil field, offshore Lagos, have resolved the legal dispute in relation to drilling of new development wells out of court.
One of the partners, Panoro Energy, announced in December 2016, seven months after the field started producing, that it was in disagreement with its JV partners over cash call and intended to initiate arbitration and legal proceedings to protect its interests.
The London-based independent exploration and production company holds 6.502 per cent participation interest in Oil Mining Lease 113, where the Aje field is located, through its subsidiary, Pan Petroleum Aje Limited.
The Commercial Court division of the High Court in London in December 2016 granted the PPAL an interim injunction, temporarily restricting the JV partners from taking any action under the default provisions of the Joint Operating Agreement that would prevent the PPAL’s continued participation in JOA and the OML 113.
Panoro, in its fourth quarter report 2017, said the dispute had been fully resolved through an out-of-court settlement.
“At Aje, the arbitration has been resolved to our satisfaction, and planning is moving ahead to develop the significant Turonian gas development,” the Chief Executive Officer, Panoro, Mr. John Hamilton, said.
Panoro said its subsidiary, the PPAL, had entered into a definitive and binding settlement agreement with the other OML 113 joint-venture partners.
It said all the partners agreed to halt and withdraw all litigation and arbitration proceedings among the partners.
“Panoro remains committed to explore all options to maximise value at Aje, including, but not limited to, a partial or full divestment of its participation in the OML 113,” the company said.
It said production at the Aje field in the OML 113 was affected by two operational shut-ins during the fourth quarter, adding that production continued from the Aje-4 and Aje-5 wells, with the Aje-4 well producing from the Cenomanian oil reservoir and the Aje-5 well producing from the oil rim of the Turonian reservoir.
“A lifting from the field was completed in November and a further lifting is anticipated in March 2018. The Field Development Plan describing the development of the Turonian reservoir has been submitted to the Nigerian regulators for consideration. In parallel, the process for the renewal of the OML 113 lease in June 2018 has commenced.”
Another London-based partner, MX Oil, which has an indirect investment in the OML 113, said in an update that the field production had stabilised at around 3,300 barrels of oil per day.
The company said it had raised £500,000 before expenses via a placing of 100 million new ordinary shares at a price of 0.5 pence per share to enable further development of the Aje project.
The Chief Executive Officer, MX Oil, Stefan Oliver, said, “I am very pleased that investors continue to be supportive and these new funds will go towards the further development of the Aje project.”
Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm, is the operator of the OML 113. Other partners are New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field).
First oil was achieved in the Aje field in May 2016, 20 years after it was discovered.
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