UMWOG (5243) - UMW-OG seeks arbitration on alleged breach of US$20m Palawan deal
KUALA LUMPUR (April 10): UMW Oil and Gas Corp Bhd (UMW-OG) has started arbitration proceedings to seek damages and compensation from Frontier Oil Corp in relation to drilling works in north-west Palawan in the Philippines.
In an announcement this evening, UMW-OG said its wholly-owned subsidiary UMW Offshore Drilling Sdn Bhd (UMWOD) has served a notice of arbitration on the Philippines-based oil and gas group today.
The move is “to seek, amongst others, an award for damages and/or compensation for all losses arising from the respondent’s breach of contract, but not limited to the early termination fee amounting to US$19.2 million (approximately RM70.46 million)”, it said.
To recap, UMW-OG, a subsidiary of UMW Holdings Bhd , had inked a US$20 million (RM73.40 million) rig contract with Frontier Oil Corp on Sept 15 last year.
Under the contract, UMWOD will provide Frontier the “UMW Naga 7” drilling unit and other related services for its drilling operations in the Calauit field.
"In accordance with Clause 2.2 of the contract, the respondent (Frontier Corp) was to have arranged for the issuance of the bank guarantee of US$5 million (RM18.53 million) and an advance payment of US$15 million (RM55.05 million) within the time stipulated in the contract, i.e on or before Dec 15, 2014," it said.
The Dec 15 date would be no later than 30 days prior to the early commence date, which was Jan 15, 2015, it noted.
"Despite repeated reminders, the respondent has failed to, refused to and neglected to arrange for the said Bank Guarantee and Advance Payment," UMW said.
It said the contract had stated that any breaches or termination shall be settled by final and binding arbitration in accordance with the Singapore International Arbitration Centre (SIAC).
"The place of arbitration shall be Singapore and the award shall be deemed to be a Singapore award," it added.
Shares in UMWOG closed three sen or 1.28% higher at RM2.38, for a market capitalisation of RM5.081 billion.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
http://www.theedgemarkets.com
KUALA LUMPUR (April 10): UMW Oil and Gas Corp Bhd (UMW-OG) has started arbitration proceedings to seek damages and compensation from Frontier Oil Corp in relation to drilling works in north-west Palawan in the Philippines.
In an announcement this evening, UMW-OG said its wholly-owned subsidiary UMW Offshore Drilling Sdn Bhd (UMWOD) has served a notice of arbitration on the Philippines-based oil and gas group today.
The move is “to seek, amongst others, an award for damages and/or compensation for all losses arising from the respondent’s breach of contract, but not limited to the early termination fee amounting to US$19.2 million (approximately RM70.46 million)”, it said.
To recap, UMW-OG, a subsidiary of UMW Holdings Bhd , had inked a US$20 million (RM73.40 million) rig contract with Frontier Oil Corp on Sept 15 last year.
Under the contract, UMWOD will provide Frontier the “UMW Naga 7” drilling unit and other related services for its drilling operations in the Calauit field.
"In accordance with Clause 2.2 of the contract, the respondent (Frontier Corp) was to have arranged for the issuance of the bank guarantee of US$5 million (RM18.53 million) and an advance payment of US$15 million (RM55.05 million) within the time stipulated in the contract, i.e on or before Dec 15, 2014," it said.
The Dec 15 date would be no later than 30 days prior to the early commence date, which was Jan 15, 2015, it noted.
"Despite repeated reminders, the respondent has failed to, refused to and neglected to arrange for the said Bank Guarantee and Advance Payment," UMW said.
It said the contract had stated that any breaches or termination shall be settled by final and binding arbitration in accordance with the Singapore International Arbitration Centre (SIAC).
"The place of arbitration shall be Singapore and the award shall be deemed to be a Singapore award," it added.
Shares in UMWOG closed three sen or 1.28% higher at RM2.38, for a market capitalisation of RM5.081 billion.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
http://www.theedgemarkets.com
