Elixir Petroleum Limited has provided an update on matters associated with Block SL-4, located offshore the Republic of Sierra Leone, of which it is the operator and 15% working interest holder.
Elixir has issued a notice of default to Prontinal Limited, its joint venture partner in Block SL-4. The notice of default relates to the failure on the part of Prontinal to meet outstanding payments with respect to the 3D seismic acquisition project which was recently concluded over the license. As a result of Prontinal's default, a letter of demand has been received by a subsidiary of Elixir from the seismic contractor in relation to the unpaid amount of approximately US $9 million. Elixir is seeking clarification from the seismic contractor in relation to the alleged debt and the letter of demand and is also seeking legal advice.
Elixir understands that Prontinal is in negotiations with third party funding sources to secure the necessary funds to meet its outstanding obligations and future foreseeable commitments with respect to Block SL-4. Elixir is endeavoring to work with Prontinal to seek the timely resolution of these issues and has been advised that arrangements to resolve these matters are advanced.
Were Prontinal ultimately unable to meet its obligations and remedy the default with regard to Block SL-4, Elixir has certain rights to have forfeited to it the equity in the license held by Prontinal, although this is not a preferred outcome or considered likely at this time.
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