In July last year May and the five Calgary-based stockholders filed a petition in the Supreme Court of British Columbia 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 have centred 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. Drillsearch maintained that the proceedings were entirely without merit

The named defendants in the action had included 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.

Following settlement of this litigation, Drillsearch Energy is now in a better position to rationalise its Canadian petroleum properties and its investment in Circumpacific Energy.

Provided it can locate suitable alternative oil and gas investments in the Australasian region, the company said this may involve redirecting assets out of Canada.