Gulfsands Petroleum PLC Claim by Al Mashrek Group in Syria (4027C)
June 28 2016 - 2:00AM
UK Regulatory
TIDMGPX
RNS Number : 4027C
Gulfsands Petroleum PLC
28 June 2016
GULFSANDS PETROLEUM PLC
Claim by Al Mashrek Group in Syria
28 June 2016
Gulfsands Petroleum plc ("Gulfsands", the "Group" or the
"Company" - AIM: GPX), the oil and gas company with activities in
Syria, Tunisia, Colombia and Morocco, wishes to provide the
following information on a claim made in the courts in Syria.
Claim by Al Mashrek Group in Syria
Al Mashrek Global Investment Ltd ("Al Mashrek") has filed a
claim with the Courts in Damascus, Syria, against Gulfsands
Petroleum Levant Limited (incorporated in Cayman Islands) ("GPLL")
and the Syrian registered branch of GPLL on the grounds that Al
Mashrek was not properly notified of the Open Offer completed in
January 2016 and hence lost the opportunity to subscribe for new
shares in the Open Offer and as a result Al Mashrek's equity was
subsequently diluted.
The Court of Appeal of Damascus has issued an order of
provisional attachment on GPLL's moveable and immovable assets,
including GPLL's share of Block 26, to secure Al Mashrek's claim of
an amount of Syrian pounds equivalent to US$2 million.
While Gulfsands continues to investigate the alleged claim it is
determined to protect it's rights in Syria and will update the
market as more information becomes available.
Background: Al Mashrek, Rami Makhlouf and EU Sanctions
Al Mashrek, a company owned beneficially by Mr Rami Makhlouf and
corporate entities in which Mr Makhlouf and other members of his
family are involved ("Makhlouf Interests"), subscribed for shares
in the Company in 2007. Prior to the Open Offer in January 2016,
these shares represented approximately 5.94% of the issued shares
in the Company, and following completion of the Open Offer in
January 2016 these shares now represent approximately 1.48% of the
issued shares of the Company.
Since the time of its first entry into Syria in 2000, the Group
has had several commercial relationships with various Makhlouf
Interests. All such relationships have been conducted on
arms-length commercial terms, have been properly documented and
have been disclosed as required by relevant laws and regulations,
including the AIM Rules for Companies. Following the imposition by
the UK in May 2011 of sanctions against certain individuals and
organisations in Syria, including Al Mashrek, Mr. Rami Makhlouf and
members of his family, the Group has suspended all payments to the
Makhlouf Interests under the commercial agreements noted below, and
has suspended some of the rights pertaining to the shares in
Gulfsands held by Al Mashrek.
Commercial agreements related to the Makhlouf Interests
Ramak, a company owned beneficially by the Makhlouf Interests,
has since 2000 provided various support and administrative services
to the Block 26 Joint Venture(s). Ramak was engaged by the original
Ocean Energy (80%) and Gulfsands (20%) joint venture to provide
advice and to assist in identifying, evaluating and pursuing
E&P opportunities in Syria, including in connection with the
successful public tender for Block 26. These services, which are
all in the ordinary course of business for an E&P venture
operating in a foreign jurisdiction, are documented in a service
contract with the original joint venture which is governed by
English law and has been amended as appropriate from time to time.
The fees have been borne by successive joint ventures pro rata to
the participants' respective participating interests from time to
time and are today the responsibility of the current 50/50 joint
venture between the Company and the Sinochem group of
companies.
Ramak has since the commencement of the original agreement in
2000, received milestone payments totalling US$900,000 from the
various joint venture partners. Gulfsands has been responsible for
US$270,000 of these payments, reflecting the Company's, pro rata
interest in these joint ventures at various points in time.
Further, milestone payments may be earned by Ramak in the event
various Block 26 production targets are reached.
The services agreement entered into with Ramak, provided Ramak
with an entitlement to receive a 2.5% Net Profit Interest on Block
26 production attributable to the joint venture and Ramak began to
receive payment in respect of this Net Profit Interest during 2010.
The cost of the Net Profit Interest has been borne in equal
proportions by the Group and Sinochem.
No payments to the Makhlouf Interests have been made since the
imposition of sanctions.
Alastair Beardsall, Chairman, said:
"The Board of Gulfsands Petroleum recognises the importance of
the Company's interest in Block 26, located in Syria, and will
vigorously defend this action in the appropriate courts."
For further information on the contract areas, please refer to
the Company's website at www.gulfsands.com or contact:
Gulfsands Petroleum Plc +44 (0)20 7464 4490
Alastair Beardsall, Chairman
Cantor Fitzgerald Europe
Sarah Wharry
Craig Francis +44 (0)20 7894 7000
Certain statements included herein constitute "forward-looking
statements" within the meaning of applicable securities
legislation. These forward-looking statements are based on certain
assumptions made by Gulfsands and as such are not a guarantee of
future performance. Actual results could differ materially from
those expressed or implied in such forward-looking statements due
to factors such as general economic and market conditions,
increased costs of production or a decline in oil and gas prices.
Gulfsands is under no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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