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Monday, January 22, 2024
United Oil & Gas has received a default notice from Kuwait Energy Egypt for a total of $3,822,143 for outstanding cash calls in relation to the Abu Sennan concession. Pursuant to the joint operating agreement (JOA) relating to the Abu Sennan concession, the company has 30 days (Default Period) to remedy the default from the start of the default period which is 28 January 2024. In the event that the company does not remedy the situation during the Default Period, then each non-defaulting party to the JOA has the option to require the company to withdraw from the Abu Sennan Concession pursuant to the terms of the JOA.
United had been in advanced discussions regarding the potential sale of its 22% stake in the Abu Sennan concession to United Energy Egypt Limited (UEEL). UEEL, a sister company of the operator Kuwait Energy; both share the same parent, United Energy Group which is listed on the Hong Kong stock exchange. However, discussions aborted as the company was unable to agree to execute the draft sale and purchase agreement (SPA) presented to it by UEEL following legal advice notwithstanding the attempts from the company to agree a mutually acceptable SPA.
United Chief Executive Officer, Brian Larkin commented: “We are very disappointed that we could not reach agreement with United Energy Egypt Limited to sell the Abu Sennan concession. We had worked tirelessly from early December and over the holiday period to finalize the Sale and Purchase Agreement and engaged external lawyers to assist through the whole process at a significant cost. We had agreed the commercial terms, however, based on external legal advice, we were unable to sign the SPA in the form that United Energy Egypt Limited presented to us. However, we believe the differences could have been easily resolved and this commercial issue avoided.”
The full release with additional details can be found within the United Oil & Gas announcement.
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