In April 2005, Horizon submitted its weather related claims under the Pemex EPC 64 project to arbitration in Mexico, in accordance with the Rules of Arbitration of the International Chamber of Commerce. These claims were presented to the arbitral panel on March 27, 2006, and on August 4, 2006, the company received notification that the arbitrators ruled that the contract precludes recovery for weather related interruptions.
Prior to the ruling, the carrying value of this claim, included in costs in excess of billings, totaled $18.5 million, net of a $33.1 million allowance for doubtful costs in excess of billings. The company had announced its financial results for the second quarter prior to its previously scheduled earnings conference call on August 3, 2006. In order to account for the effect of the arbitrators ruling, the company expects to release revised financial results for the quarter ended June 30, 2006, before the opening of the market on Monday.
Horizon and its subsidiaries provide marine construction services for the offshore oil and gas industry. The company's fleet is used to perform a wide range of marine construction activities, including installation and repair of marine pipelines to transport oil and gas and other sub sea production systems, and the installation and abandonment of production platforms.
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