An Indian court has stopped Oilex from enforcing a default notice until early September, after partner Gujarat State Petroleum Corporation allegedly failed to pay its share of expenses.
Oilex is an ASX-listed oil and gas explorer focused on a flagship project called Cambay in India’s western region of Gujarat.
The High Court of Gujarat has ordered the company (ASX:OEX) not to take “any coercive steps” until September 4.
Oilex wants the interest in the Cambay product sharing agreement transferred back to it.
The company has been working on the Cambay field in Gujarat since 2005.
It served a default notice to its joint operating partner the Gujarat State Petroleum Corporation in May after the state enterprise failed to pay its share of $US3.1 million in expenses.
In product sharing agreements usually the State covers the costs of bringing a well into production in exchange for a percentage of the oil or gas produced.
Oilex issued a default notice on the state company in May.
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In July, they asked the national petroleum directorate and ministry to transfer the state company’s interest in the Cambay agreement to Oilex, as per the agreement.
But the Gujarat State Petroleum Corporation has convinced the courts to hit pause on the transfer.
“We are confident that the company has followed the correct legal process and intends to fully enforce its rights as necessary to facilitate the successful development of the Cambay Project,” said managing director Joe Salomon.
Oilex has wanted the state company’s share of the field since at least 2016, when it entered a tender to buy out Gujarat State Petroleum Corporation’s 55 per cent.
But after several delays, in July Oilex said it has received informal advice that the sale process was probably off.
Oilex shares, which are dual listed on the AIM in London, were flat on Tuesday at 0.2c. In London, they plunged 33 per cent to 17.5p.