On April 24, 2007 Loon disclosed that it had commenced legal proceedings in the High Court in London, England (the "High Court"), seeking declaratory relief against Bumico and Integra. Loon was seeking orders to protect the 90% interest in the rights Brunei National Petroleum Company Senderian Berhad ("PetroleumBRUNEI") had awarded to Loon's wholly-owned subsidiary, Loon Brunei, in Block L in Brunei Darussalam ("Block L"), against allegations made by Bumico and Integra that those entities were entitled to a 40% interest in Block L.
On August 7, 2007 Loon disclosed the outcome of the High Court proceedings. The High Court confirmed that neither Integra nor Bumico had any rights in Block L under the written agreements that were subject to English law ("English Law Agreements"), save for Integra's residual entitlement ("Original Entitlement") to receive US$1.5 million out of 50% of Loon's entitlement to hydrocarbons produced and sold under the terms of the Production Sharing Agreement.
Since April 20, 2007 Bumico and Integra have also pursued arbitration proceedings against Loon and Loon Brunei pursuant to the terms of the initial agreement between the Loon and Integra which is governed by the laws of Texas. These proceedings are terminated as a part of the settlement between the parties.
Loon, Loon Brunei, Bumico and Integra have now entered into a settlement agreement ("Settlement Agreement"), pursuant to which all of Bumico's and/or Integra's disputes with Loon and/or Loon Brunei over Block L have been resolved.
The Settlement Agreement provides that, without admission of liability, Loon will pay to Integra and Bumico: (i) US$1.2 million; (ii) US$800,000 in quarterly installments over the following 18 months; and (iii) US$3.5 million out of 10% of Loon's entitlement to profit oil that is produced and sold under the terms of the Production Sharing Agreement. Integra, Bumico and its directors will, in return, give up the Original Entitlement and make no further claim or assertion of any right whatsoever against Loon or Loon Brunei in connection with Block L or any other Brunei concession area, other than to those rights provided for in the Settlement Agreement.
Most Popular Articles