Seplat’s Newton Energy embroiled in USD20.5 million escrow lawsuit

OPL 245

Seplat Petroluem Development Company Plc said there is proceedings have been commenced in the English High Court against its wholly owned subsidiary Newton Energy Limited.

The company disclosed that the lawsuit is relating to the deposit of US$20.5 million currently held in an escrow account.

Seplat said the Escrow Monies relate to the potential acquisition of an interest in OML 25 (the “asset”) by Crestar, which Newton has an option to invest into, and were put into escrow in July 2015 pursuant to an agreement reached with Crestar
and the vendor on final terms of the potential transaction, further details of which were announced by Seplat on 9 July

As a background, the potential acquisition of an interest in OML 25 was initially identified in 2014 at which time the Group placed a sum of US$453million as a deposit towards the potential investment. However, after material delays, US$368 million was returned to the Group in July 2015.

Without explicit details, Seplat said “Certain events then led to renewed efforts by the consortium to secure the asset
and to the Group providing the Escrow Monies. Furthermore, the Group has paid US$11 million to Crestar for past
costs and a US$45 million deposit remains with the potential vendor of the asset.

The company said it will defend the Claim “vigorously”.

It also confirmed that “A further announcement, if appropriate, will be made in due course”.

Seplat itself is not doing well financially since the crash in global oil prices. The company said its gross revenue for the nine months period ended in September fell by 51% year on year.

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