PROVIDENCE RES. Providence Resources P.L.C. - Commercial Court Ruling Issued

 
TIDMPVR 
 
 
 
 
   COMMERCIAL COURT RULING ISSUED 
 
   PROVIDENCE SUCCESSFULLY DEFENDS TRANSOCEAN'S 
 
   PART 36 COSTS APPLICATION 
 
   Dublin and London - October 21, 2016 - Providence Resources P.l.c. (PVR 
LN, PRP ID), the Irish based Oil and Gas Exploration Company (the 
"Company"), today provides an update regarding the litigation between 
Providence and Transocean Drilling U.K. Limited ("Transocean"), a 
subsidiary of Transocean Ltd, relating to the use of the 
semi-submersible drilling unit, Arctic III, on the Barryroe oilfield 
offshore Ireland (Providence 80%, Lansdowne Oil & Gas plc 20%).  A 
hearing of Transocean's application in respect of Part 36 of the English 
Civil Procedure Rules was heard by Mr Justice Popplewell in the 
Commercial Court in London on October 14, 2016.  The Commercial Court 
handed down its Judgment (the "Judgment") on October 20, 2016. 
 
   The Judgment states that, as a result of the decision of the Court of 
Appeal in April 2016, Transocean is entitled to its costs of the first 
instance proceedings from August 30, 2014 on the Standard Basis (i.e. 
approximately 70%) but that the other Part 36 cost consequences in 
relation to obtaining costs on the indemnity basis, interest on costs 
and the principal sum and the surcharge of GBP75,000 do not apply.  In 
coming to this conclusion, the judge found that it would be unjust to 
apply the full Part 36 costs consequences in the circumstances of this 
case, including his previous criticisms of Transocean's conduct which he 
said "was not merely unreasonable but dishonest".  Based on the Judgment, 
Providence will pay Transocean a gross figure of approximately GBP1.10 
million (equivalent to approximately $1.35 million)  in respect of all 
outstanding costs, interest and principal sums, which compares to the 
estimated gross figure of $3.90 million described in the Company's 
Interim Results.  Lansdowne, the Company's joint venture partner in 
Barryroe (20% interest), is liable for its share of all costs associated 
with the litigation. 
 
   Commenting on the announcement, Mr. Tony O'Reilly said: 
 
   "This is a very positive result for Providence, with significantly less 
cost exposure than had been provided for, justifying our defence of our 
position.  With this matter now behind us, our focus remains on 
unlocking the value within our extensive asset portfolio offshore 
Ireland, with a particular emphasis on the farm-out processes for 
Barryroe and Spanish Point as well as completing our preparations for 
the drilling of Druid next June." 
 
 
 
 
INVESTOR ENQUIRIES 
 Providence Resources P.l.c.               Tel: [phone] 
 Tony O'Reilly, Chief Executive Officer 
 
 Cenkos Securities plc                    Tel: [phone] 
 Neil McDonald / Derrick Lee 
 
 J&E Davy                                 Tel: [phone] 
 Anthony Farrell 
 
  MEDIA ENQUIRIES                          Tel: [phone] 
  Powerscourt 
  Lisa Kavanagh/Peter Ogden 
 
 Murray Consultants                       Tel: [phone] 
 Pauline McAlester 
 
   ABOUT PROVIDENCE RESOURCES 
 
   Providence Resources is an Irish based Oil and Gas Exploration Company 
with a portfolio of appraisal and exploration assets located offshore 
Ireland.  Providence's shares are quoted on AIM in London and the ESM in 
Dublin. 
 
   ABOUT THE LITIGATION 
 
   Commercial Court Ruling - December 2014 
 
   In May 2012, Transocean initiated proceedings against the Company for c. 
$19 million.  The Company counterclaimed pleading that Transocean was in 
breach of contract because their rig and their equipment were not in 
good working condition or adequate to conduct the drilling activities 
over most of a period from late December 2011 through to early February 
2012.  In December 2014, a judgment was handed down by the Commercial 
Court in London (the "First Instance Judgment") which confirmed the 
Company's pleadings that it should not have to pay Transocean for those 
periods when the rig was not operable, due to breaches of contract 
arising from Transocean's failure to carry out maintenance on safety 
critical parts of its sub-sea equipment.  The First Instance Judgment 
provided that the Company should also be allowed to set-off certain 
third party costs against Transocean's claim.  Pursuant to the First 
Instance Judgment, the Company paid a net amount of c. $6.15 million and 
Lansdowne paid c. $1.54 million. 
 
   Court of Appeal Ruling - April 2016 
 
   Transocean was granted the right to appeal one aspect of the First 
Instance Judgment.  In April 2016, the Court of Appeal ruled in favour 
of Transocean's appeal (the "Appeal Judgment").  The appeal of this one 
aspect of the First Instance Judgment turned on the Court of Appeal's 
interpretation of the wording of the consequential loss clause in the 
rig contract. 
 
   By Order of Her Majesty's Court of Appeal of England and Wales in April 
2016 (the "EWCA Order"), the Company was ordered to pay Transocean a 
gross amount of c. $6.77 million in respect of certain costs claimed by 
Transocean in the context of the original legal proceedings issued 
against the Company by Transocean in May 2012.  The EWCA Order further 
stated that the Company was required to pay part of Transocean's legal 
costs of the appeal in the sum of gross GBP225,000.  As confirmed on 
July 20, 2016, the Company discharged the sums owing to Transocean in 
respect of the Court of Appeal order.  The EWCA Order also stated that 
any other matters in dispute between the Company and Transocean in the 
legal proceedings would be the subject of a further hearing in the 
Commercial Court in London unless otherwise resolved between the 
parties.  As notified on September 29, 2016, a date of October 14, 2016 
was set for this hearing. 
 
   Part 36 Matter 
 
   The matter considered by the Commercial Court on October 14, 2016 was 
whether Transocean was entitled to its legal costs (and interest 
thereon) in respect of the First Instance Judgment for the period from 
August 30, 2014, on the basis of Transocean having previously made an 
offer to the Company to reach a settlement in respect of those 
proceedings pursuant to Part 36 of the English Civil Procedure Rules 
(the "CPR").  Part 36.14 of the CPR provides that, where judgment 
against a defendant (in this case, the Company) is at least as 
advantageous as the proposals in the Part 36 offer, the offeror (in this 
case, Transocean) would be entitled to its legal costs and interest on 
those costs together with interest on the principal sums from the date 
upon which the period for acceptance of the offer expired.  The Company 
had previously estimated that, in the event that Transocean was 
successful in the Commercial Court in relation to this matter, an 
additional gross payment of c. $3.90 million would be required to be 
made to Transocean. 
 
   Commercial Court Ruling - October 2016 
 
   The judgment of Justice Popplewell on the Part 36 matter was handed down 
on October 20, 2016.  Based on the Judgment, Providence will pay 
Transocean a gross figure of approximately GBP1.10 million (equivalent 
to approximately $1.35 million) in respect of all outstanding costs, 
interest and principal sums, which compares to the previous estimated 
gross figure of $3.90 million outlined in the Company's Interim Results. 
Lansdowne, the Company's joint venture partner in Barryroe, is liable 
for its (20% interest) share of all costs associated with the 
litigation. 
 
   Supreme Court Appeal - Pending 
 
   The Company has sought leave to appeal the April 2016 Appeal Judgment to 
the Supreme Court in the United Kingdom.  A decision on the grant of 
such leave to appeal is expected to take between nine months and one 
year to be reached and further announcements will be made in this regard 
in due course. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Providence Resources plc via Globenewswire 
 
 
  http://www.providenceresources.com/html/ 
 

(END) Dow Jones Newswires

October 21, 2016 02:01 ET (06:01 GMT)

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