Lansdowne Oil and Gas has invoked an agreement allowing it to raise £300,000 through a share placing to cover the cost of a legal dispute with Transocean.
Lansdowne’s fully underwritten option agreement with its major shareholder, Brendon Hill Capital, was intended up provide up to £500,000 with the case in mind.
Transocean initially claimed Lansdowne and its field partner, Providence Resources, owed it $19million (£15million) regarding the use of the Arctic III drilling rig on the Barryroe field off Ireland.
In the initial case, the commercial court in London ruled Transocean was in breach of contract for failing to maintain various parts of its sub-sea equipment and was not entitled to certain remuneration.
But the appeal court overturned the ruling earlier this year and ordered Providence and Lansdowne to pay Transocean £5.5million.
Lansdowne’s share has been estimated at about £260,000.
Lansdowne chief executive Steve Boldy said: “This dispute arose as a result of the failure of equipment on the rig whilst drilling the Barryroe appraisal well, leading to extensive delay and cost over-run.
“The long-running litigation has been a painful and distracting experience for the company and it is a great relief to finally put this behind us.
“We can now focus solely upon moving the Barryroe project forward. Given the recent and projected continued strengthening of the oil price, the company remains optimistic that a long awaited farm out will be able to be concluded in 2017.
“With net 2C contingent resources to Lansdowne of 68mmboe and significant additional upside, the Board believe significant value remains to be unlocked and will look to explore a variety of avenues to ensure this takes place.”