Oilex has been looking to purchase 55% of Cambay field since 2016
Oilex (LON:OEX) shares soared on Thursday as the firm made progress towards settling a dispute over an Indian gas project which it has been aiming to secure control of for a number of years.
The AIM-listed company has been looking to purchase 55% of the Cambay field since 2016. However, the company found itself in the midst of a dispute with the state-backed Gujarat State Petroleum Corporation Limited (GSPC) over costs, which even went as far as an Indian courtroom.
The disagreement now appears to be on the road to a resolution. Oilex has now confirmed that GSPC has given the green light for the sale of its stake for $2.2m, as well as the state government of Gujarat, giving Oilex 100% of the field.
The oil company still needs further approval of the Indian government for the sale to go ahead, including the finalisation of a binding sales and purchase agreement, and finalisation of funding arrangements, which the company expects will go ahead in Q2 of 2021. At this point Oilex will be able to resume field work.
Joe Salomon, managing editor of Oilex, expressed relief at the news and provided a roadmap forward.
“We are pleased that Oilex and GSPC have been able to work together to agree this outcome and in doing so a major milestone has been achieved by the Company in the face of many challenges,” Salomon said.
“The long-awaited resolution provides the Company with a pathway to evaluate the significant gas resource potential identified at Cambay. Oilex and GSPC continue to work together to finalise past pending costs related to certain field costs and regulatory spending prior to 2018.”
The news has sent the company’s AIM-listed shares up 142% or 0.4p.