Mediterranean Oil & Gas refutes all Leni Gas & Oil claims

In a statement issued today, Mediterranean Oil & Gas refuted claims which have been made by Leni Gas & Oil.

The board said that the company has addressed the allegations in lengthy and detailed correspondence over a period of four months. "The allegations made are unfounded and the Company will defend itself and the interests of its shareholders rigorously and will seek indemnity costs against Leni Gas & Oil," a statement from MOG said.

The Genel Energy Plc transaction announced by MOG on 21 December 2012, and the proposed Malta work programme, which includes drilling contracts being signed for commencement of drilling in Q4 2013, are unaffected by this dispute, the company said.

Last August, Leni Gas & Oil (LGO) announced that Leni Gas and Oil Investments Limited (LGOI), a subsidiary of LGO, had agreed to sell its interest in the Malta Area 4 Production Sharing Contract (PSC) to Phoenicia Energy Company Limited (PECL), a subsidiary of MOG.

PECL agreed to pay LGOI a consideration of US$1 for the Interest with an effective date of 1 January, 2012. In addition, PECL was to assume liability for LGOI's residual costs arising under the 'Joint Operating Agreement' between the Parties associated with the acquisition of 3D seismic data in 2011 estimated to be of the order of US$20,000 for the to end-2011.

Subsequently MOG announced on 23 August 2012 that its wholly owned subsidiary, PECL, had entered into a conditional farm-out agreement with Genel Energy Plc (Genel), in relation to PECL's 100% interest in Area 4 Offshore Malta; only 23 days after LGO agreed to sell its working interest to MOG for US$1.

MOG also announced on 21 December 2012 that it had signed the two key contracts with Genel that enable Genel's acquisition of a 75% working interest in MOG's wholly owned subsidiary, PECL. This follows the Government of Malta granting a one year extension to January 2014 of the first exploration phase of the PSC for Malta Offshore Area 4.

In a reply posted on its website last September, MOG said that its board refuted the suggestion in LGO's announcement that MOG or PECL may have misrepresented its position to LGO.

"As such, MOG has instructed its legal advisors to address directly the matters raised by LGO, as appropriate, and to uphold and enforce MOG's rights," it said.