Elixir Petroleum announced that its subsidiary, Elixir Petroleum (UK) Limited ("EP(UK)"), has received a notice of arbitration issued by TGS-NOPEC Invest AS ("TGS"), the seismic contractor who acquired 3D seismic over Block SL-4, located offshore Sierra Leone during the course of 2008.
The notice of arbitration relates to an alleged dispute concerning payment of approximately US $9.3 million for the seismic data acquired by TGS. EP(UK) has been named as a co-Respondent in the arbitration together with Prontinal Limited, EP(UK)'s former joint venture partner in the Block SL-4 joint venture. EP(UK) understands that an existing arbitration in relation to the dispute is currently in progress between Prontinal and TGS.
It remains the view of EP(UK) that Prontinal Limited, is responsible for the payment of any sums that are found to be due to TGS in respect of the 3D seismic acquisition and processing, notwithstanding the forfeiture of their interest in Block SL-4 to EP(UK).
As previously advised, EP(UK) has commenced legal proceedings in the British Virgin Islands seeking recovery of monies owed to it by Prontinal Limited and the winding up of Prontinal.
Prontinal has lodged documentation to set aside the proceedings, with a hearing on this matter currently set down for mid-March 2009.
EP(UK) is in the process of obtaining advice from its legal counsel in relation to the Notice of Arbitration, but at this stage intends to vigorously defend its position with respect to the arbitration.
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