STOCKHOLM -- PA Resources' subsidiary Osborne Resources has
entered into an agreement with its partners to settle the dispute
regarding block H in Equatorial Guinea.
The dispute arose in June 2007 between the operator Pioneer Natural
Resources Equatorial Guinea and its partners in block H offshore
Equatorial Guinea, including Osborne Resources, Roc Oil Equatorial
Guinea, and Atlas Petroleum International.
The essence of the dispute was a disagreement about how and when a
second exploration well should be drilled in block H and related
drilling costs. Arbitration was claimed and the drilling of the well was
PA Resources, Roc Oil, and Atlas have now entered into an agreement to
settle the dispute with Pioneer. The dispute relates to the 2004
farm-in, whereby Pioneer acquired its interests in the block H PSC and
joint venture from Roc Oil, Atlas, and PA Resources.
Key terms of the dispute settlement are as follows:
1. Payment by Pioneer to Roc Oil, Atlas, and PA Resources of $5.5
2. Assignment by Pioneer of its 50% interest in the PSC and under the
joint ventures agreement to PA Resources, Roc Oil, and Atlas. As a
result, PA Resources will hold a 6.25% interest in block H compared to
3.125% before the settlement.
3. Pioneer Natural Resources USA Inc. will assign to Roc Oil and the
partners an option to use the Aban Abraham drilling rig to drill
the proposed Aleta-1 well. The rig is currently expected to be available
in the second half of 2009.
Settlement of the dispute is subject to relevant government approvals
for assignment of the Pioneer interest and satisfaction of conditions in
the rig contract relating to assignment of the rig.