Listed upstream oil and gas firm PXP Energy Corp. said on Friday that its units have entered into a settlement with Australia’s Karoon Energy Ltd., which is required to pay $9.6 million in cash over an exploration dispute in offshore Peru.
PXP Energy owns majority or 53% of Pitkin Petroleum Ltd. (PPL), which has a 25% participating interest in Peru Block Z-38 through its wholly-owned subsidiary, Pitkin Peru. Meanwhile, KEI (Peru Z-38) Pty Ltd. Sucursal del Peru (KEI Peru), a wholly-owned unit of Karoon Energy, is the operator of the Peru block.
Pitkin Peru previously determined that KEI Peru will not take any action to extend the license contract for the exploration of hydrocarbons in Block Z-38 located in offshore Peru, and this includes going into the “fourth exploration phase.” Because of this, the Peru government terminated the license.
Pitkin Peru also claimed that KEI Peru did not fulfill its obligations when it did not give notice on or before June 27 whether it would enter into the fourth exploration phase, embark on activities required in drilling a second exploratory well, and shoulder all of Pitkin Peru’s expenses in the drilling works.
In its latest regulatory filing to the local bourse on Friday, PXP Energy said that KEI (Peru Z-38) Pty Ltd. (KEI), which fully owns KEI Peru, is due to pay a settlement fee of $9.6 million or approximately P479.29 million.
“Under the deed, KEI has agreed to pay US$9.6 million in cash to PPL in full and final settlement of all claims by Pitkin Peru and its associates in connection with Block Z-38. The said deed will be effective upon the receipt of the settlement sum by PPL within 3 business days upon signing of the deed,” PXP Energy said in a disclosure on Friday.
Shares of PXP Energy in the local bourse shed 2.41% or 15 centavos to finish at P6.06 apiece on Friday.
PXP Energy is a unit of Philex Mining Corp., which in turn is one of the Philippine units of Hong Kong-based First Pacific Co. Ltd, the others being Metro Pacific Investments Corp. and PLDT Inc.
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