Carnarvon told the ASX this morning it and Tiger's 93% stakeholder, Pan Orient, had settled all current litigation regarding the Wichian Buri SW1A joint venture.
In May this year, Carnarvon gave Tiger notice of its intention to withdraw from the project and initiated court action for underfunding its share of expenditures.
The claim sought specific performance of the joint operating agreement. It included an order that Pacific Tiger transfer all its interests in the joint venture to SEAL, a declaration that the joint venture properties include Exploration Block L33/43, damages of US$2.2 million for negligence, breach of contract and breach of fiduciary duties, and ancillary relief.
But Carnarvon company secretary Rick Pullia said this morning that settlement terms had been resolved amicably on an equitable commercial basis that would provide a sound platform for future operation of the joint venture.
Pan Orient’s technical work was well advanced for a planned aggressive exploration and development program, according to Pullia.
“Exchange of technical information and dialogue was established during the course of negotiations,” he said.
“Pan Orient and Carnarvon can now confidently look forward to a strong working relationship to explore and develop the joint venture assets.”
Subject to formal approval by the Board of Tiger, the principal terms agreed between Carnarvon and Pan Orient include:
• Pan Orient to fund SEAL’s share of drilling costs for the next two wells to a maximum budge of US $350,000 (A$476.5 million).
• A restructured joint venture, to ensure the commercial interests of both firms are adequately protected.
• Pan Orient appointed as operator of the joint venture.
• A new operating agreement to include terms and conditions in line with industry standards
• Confirmation that SEAL is entitled to a 40% interest in exploration block L33/43 and acknowledgement that it will contribute 40% of all reasonable costs from the application date.
• SEAL to discontinue all current litigation and Pan Orient agreeing that US$100,000 of any amounts owing or incurred in the restructure of the joint venture will be waived or credited.
• Appropriate forms of indemnification and release by Carnarvon and Pan Orient.
