Oilex Clarifies Interest Holdings in West Kampar PSC Onshore Sumatra
Oilex (West Kampar) Limited (Oilex), a wholly owned subsidiary of Oilex Ltd, advised that reports in the Indonesian press stating or implying that Oilex no longer has an interest in the West Kampar Production Sharing Contract (PSC) onshore Sumatra, Indonesia are incorrect. Oilex retains its 45% interest in the PSC and is currently increasing its interest by an additional 22.5% interest pursuant to its legal entitlements as previously reported.
Oilex continues to pursue the early development of the Pendalian field and the ongoing work program including the acquisition of seismic surveys to maximize the value of the West Kampar asset.
Background on West Kampar Reimbursement and Interest Transfer
As summarized in the April Quarterly Report, following Oilex's termination of a farm-out arrangementin January 2009, Joint Venture participant PT Sumatera Persada Energi (Operator)is required to reimburse monies advanced by Oilex under the terms of that agreement and Oilex holds security for that reimbursement. The amount due to be repaid is approximately US $3.5 million plus
interest and costs. While SPE has acknowledged itsobligation to repay monies advanced, no repayment has yet been made. Oilex is vigorously pursuing its rights to recover the monies advanced (plus interest and costs) under the relevant agreements including enforcing security which is held by Oilex.
To that end, Oilex has transferred a 22.5% participating interest in the PSC from SPE to Oilex pursuant to Oilex's rights under a Power of Attorney granted by SPE to Oilex in August 2008 at the time of entering into the second farm-out agreement. The transfer is currently before BPMigas, the Indonesian Government regulator. Oilex will pursue the sale of this 22.5% interest to recover monies owed to Oilex.
To ensure that recovery of all monies owed to Oilex is met in full, SPE's parent company PT Asiabumi Petroleo granted to Oilex a Parent Company Guarantee that would be enforced in the event that the sale of the 22.5% transferred to Oilex under the Power of Attorney was insufficient to cover the payments due to Oilex. In accordance with the provisions of the Parent Company Guarantee,
Oilex has commenced an arbitration proceeding against PT Asiabumi Petroleo in the International Chamber of Commerce Court of Arbitration in Singapore.
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