Arc and Rey signed a letter of intent in early June to participate in the Canning Basin blocks “subject to the fulfillment of certain conditions precedent”.

But Rey yesterday said in an announcement to the Australian Stock Exchange that Arc had failed to fulfill the conditions precedent by the required date.

It said instead it had entered into a binding agreement with Gujarat NRE Mineral Resources and its Australian Subsidiary, NRE Resources to farm into the permits.

But Arc rejected the claims and said in a statement that the agreement with Gujarat was likely to require approval of Rey’s shareholders.

“Arc rejects Rey’s assertion in its ASX release that the conditions precedent to the agreement between Rey and Arc were not fulfilled,” it said.

“Arc’s position is that Rey and Arc continue to be bound by the terms of their agreement.”

Arc managing director Eric Streitberg declined to comment further when contacted by PetroleumNews.net yesterday afternoon.

The company also said the applications subject to the agreement with Rey only cover a portion of its holdings in the Canning Basin. All other areas held by Arc have undisputed and secured title, it said.