Former VP, William R. May, and five Calgary-based stockholders filed the petition in the Supreme Court of British Columbia last month claiming the affairs of Circumpacific had been conducted in a manner that was "oppressive and unfairly prejudicial to the interests of the minority shareholders of Circumpacific".

The action is understood to centre on the alleged improper transfer of funds from Circumpacific to major shareholder Drillsearch Energy. The action also claims that $388,000 worth of shares in a financing deal were not properly paid for.

The shareholders named as plaintiffs are Mr May, Robert Schiesser, Bert Peters, Peter Weichler, Dan McArthur and David Smiddy.

The named defendants include Circumpacific, the company's managing director Philip Francis Kelso and fellow or past directors Charles E Ross, Malcolm Fraser, Michael Silver and Graham Charles Reveleigh.

On Friday, Drillsearch Energy put out a statement to the ASX saying that the company "is of the view that the proceedings are entirely without merit." Circumpacific has briefed legal counsel to defend the proceedings.

Attempts by EnergyReview.net to discuss the action with Mr Kelso were unsuccessful.