Australia's oil and gas company Swala Energy Ltd. (the Company) disclosed Friday that it has been served notice by lawyers acting on behalf of Otto Energy Ltd. (Otto) that Otto has commenced a legal action against the Company, Swala Oil and Gas (Tanzania) plc (SOGTP) and current and certain former directors of the Company and is seeking to recover a gross amount of approximately $1 million plus alleged damages.
Otto's action relates to the Pangani license, a license operated by SOGTP with a 25 percent working interest. The Company holds a 58 perent interest in SOGTP. The Company, SOGTP and the Company's current and former directors intend to defend such legal action with vigor and, having taken initial legal advice, are of the opinion that Otto's claim has no legal merit. The Company will update the market further in due course.
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