Tap Oil Ltd., Perth, has reached an agreement with Mubadala Petroleum, the operator of Manora oil field offshore Thailand, regarding settlement of the final capital costs of the field’s development facilities.
In March 2015 Tap Oil said there had been an unexpected capital expenditure increase of $28 million for field construction work because of delays in hook-up, commissioning, and claims from the construction contractor. Tap’s share was $8.4 million.
The partners had curtailed drilling in April 2015, deciding to postpone indefinitely the drilling of two production wells and one injection well in the field (OGJ Online, Apr. 9, 2015).
This week’s settlement sees Tap agreeing to pay $5 million of the final disputed amount of $9.1 million. This will be paid in two equal instalments on Sept. 30 and Dec. 31.
The settlement ensures Tap’s exposure to any further related costs or claims is eliminated and provides the company with greater certainty around the value of the Manora development to the company that it has on its books (at June 30, 2015) as $105.7 million.
As part of the agreement, Tap also has been given extended time to pay $5 million worth of cash calls that will now be paid in two $2.5 million instalments on Mar. 31 and June 30.