- Canadian Overseas Petroleum (CSE:XOP) joint venture, Shoreline Canadian Overseas Petroleum Development, is having legal proceedings brought against it
- Canadian Overseas’ joint venture partner, Essar Exploration & Production, has filed a claim against Shoreline Canadian with the High Court of Justice of England and Wales
- Essar claims that Shoreline Canadian has failed to commence funding the OPL226 offshore oil project, outlined in the shareholder’s agreement
- As a result, Essar is pursuing C$89 million in damages and the termination of the shareholders agreement
- Canadian Overseas Petroleum (XOP) is holding steady, with shares trading at half a cent and a $14.9 million market cap
Oil and gas explorer, Canadian Overseas Petroleum (CSE:XOP) has been notified of legal proceedings brought against its joint venture company.
The company’s joint venture partner, Essar Exploration & Production has filed a claim with High Court of Justice of England and Wales against Shoreline Canadian Overseas Petroleum Development Corporation.
The claim regards a shareholder’s agreement from August 2015. Through the agreement, Shoreline Canadian acquired an 80 per cent interest in another joint venture with Essar, called Essar Nigeria. Essar Nigeria formed in order to develop the OPL226 offshore oil project.
Since 2018, Essar has claimed that Shoreline Canada has failed to commence funding OPL226. The shareholder agreement requires Shoreline Canada to provide C$80 million in cumulative funding.
As a result, Essar wishes to terminate the agreement, which could nullify the Essar Nigeria joint venture. The parties have been unable to reach an agreement through internal channels. Therefore, Essar has chosen to pursue C$89 million in damages, through the courts.
Canadian Overseas Petroleum’s President and CEO, Arthur Millholland, appears unperturbed by the impeding legal proceedings.
“We believe this legal action is merely opportunistic at this time of a global health pandemic and the associated global economic crisis.
“The company has attempted for some time to resolve these issues with Essar Mauritius without success. We intend to defend the Essar Mauritius’s legal action rigorously,” he said.
Canadian Overseas was quick to point out that Essar is not pursuing the company itself, only its joint venture.
Canadian Overseas Petroleum (XOP) is holding steady, with shares trading for half a cent at 10:59am EST.