Tri-Star Australia Holding Company disclosed Tuesday that the Tri-Star group of companies has commenced proceedings in the Supreme Court of Queensland against Australia Pacific LNG Pty Ltd (APLNG), seeking court orders that reversion has occurred for its 45 percent interests in coal seam gas (CSG) assets in more than 60 petroleum tenements and tenement applications in Queensland, Australia.
The interests are currently operated and/or held by Australia Pacific LNG Pty Ltd (APLNG) and relate to tenements located in the Bowen, Surat and Galilee Basins in Queensland, including CSG fields in the Fairview, Durham, Walloon, Condabri, Durham and Spring Gully project areas. Tri-Star discovered CSG on these fields and appraised them during the 1990s.
In 2002, Tri-Star group companies ‘farmed out’ their interests to APLNG (then Oil Company of Australia Ltd.) to operate and develop under a farmout and reversion deed (the 2002 Deed).
Under the 2002 Deed, Tri-Star group and APLNG agreed that 45 percent of Tri-star’s rights to CSG projects in those tenements revest in Tri-Star when benefits to APLNG and revenue to its affiliates from the farmed out interests first exceeded agreed development costs. Relevant costs include capital and operating expenditures, interest and vendor and government royalty payments.
The Supreme Court has been asked to confirm that benefits received by APLNG and its affiliates from third party contracts and arrangements have in fact triggered reversion.
Tri-Star contends that these contracts and arrangements include:
The Statement of Claim in the proceedings also asks the Supreme Court to rule on the proper interpretation of sales proceeds and revenue, interest and royalty payments for purposes including calculating the reversion date.
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