Providence Resources Eyes $7 Million Payment Following Court Ruling -- Update

By Alex MacDonald

LONDON--Ireland-based oil and gas explorer Providence Resources PLC(PZQA.DB) said Wednesday that it will likely have to pay $7 million to oil and gas drilling company Transocean Ltd. (RIG) following the conclusion of a U.K. appeals-court ruling.

The ruling stems from a 2012 case in which Transocean alleged that Providence owed it $19 million for the use of its Arctic III semi-submersible offshore rig at the Barryroe oilfield in Ireland between 2011 and 2012.

The court ruled on Wednesday that the "set-off point" for Transocean's claim, namely that it wasn't appropriately compensated, has merit. However, the court also upheld a previous ruling that found that Transocean was ultimately in breach of failing to maintain various parts of the disputed sub-sea equipment contract and therefore wasn't entitled to full remuneration.

Providence estimates the financial implications of the Court of Appeal's judgment will result in a $7 million payment to Transocean, excluding interest and costs. The parties however are still determining the final amount.

In the meantime, Providence is in active discussions with financial advisors and its current debt provider to ensure it has the appropriate financial resources to meet its obligations to Transocean.

Lansdowne Oil & Gas PLC (LOGP.LN), which is 18.67% owned by SeaEnergy PLC (SEA.LN) and has a 20% interest in the Barryroe Field, said in a separate statement it will need to raise capital to meet any liabilities that might arise from the court ruling.

The London shares of both Providence Resources and Lansdowne remained suspended after the ruling, having been halted on Wednesday in anticipation of the court ruling.

-Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

April 13, 2016 09:18 ET (13:18 GMT)

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