MANILA, Philippines — Singapore-based oil and gas company Jadestone Energy Inc. won an arbitration case against Total E&P Philippines BV over a dispute in an offshore block in the Philippines.
Jadestone said its wholly owned subsidiary Mitra Energy had been awarded monetary damages, plus a portion of the legal costs and expenses.
This was a result of an arbitration action against Total in response to a breach of the 2012 farm out agreement (FOA).
The notice of arbitration was filed with the Singapore International Arbitration Centre.
Jadestone said Total failed to drill an exploration well on the deepwater Halcon prospect, located within the block covered by Service Contract (SC) 56 in the Sulu Sea.
“The SC 56 asset is not consistent with our strategy and was inherited from the former Mitra Energy management team. It has remained in the Jadestone portfolio solely as a result of the carried well commitment, which was intended to provide a cost-free option to further test this frontier basin,” Jadestone president and chief executive officer Paul Blakeley said.
Total is the operator of SC 56 with a 75 percent interest. Mitra holds the remaining 25 percent.
Jadestone said the Singapore tribunal was in favor of Mitra and concluded that Total breached the FOA.
It awarded monetary damages to Mitra “of $11.075 million, less specific expenditures incurred prior to the breach to be agreed or determined if the parties cannot agree and legal costs of approximately $4.3 million.”
Meanwhile, the tribunal’s costs will be borne by Mitra and Total 25:75.
“It was important for the company and our shareholders to pursue our legal rights to a successful conclusion. With the satisfactory resolution of this matter, we can now refocus on our strategy to deliver exceptional value to shareholders, through investment in producing assets and discoveries which can be quickly developed for early cash flow,” Blakeley said.