Nostra Terra clarifies position on TransGlobe dispute

Nostra Terra noted an announcement made by Independent Resources on Monday morning, concerning the company's joint venture vehicle Independent Resources Egypt (IRE).

The AIM-traded firm owns IRE jointly with Independent Resources, and said it wanted to issue a further clarification to shareholders.

Independent’s update said that in the announcement of its results for the financial year ended 31 December, it provided an update on the status of its discussions with TransGlobe Petroleum International on the status of the loan note issued to TransGlobe by Independent Resources Egypt, in connection with IRE's acquisition of its interest in the East Ghazalat concession.

It said it has now been notified by TransGlobe that it considers IRE is in default of its obligations under the note since it has not paid accrued interest of around $0.12m, which it claims was due on 31 March and is demanding immediate repayment of the entire principal amounts and all unpaid accrued interest.

IRE rejected TransGlobe's basis of claim and said it remains confident that it is not due to pay any interest on the note until the quantum has been established in accordance with the provisions of the sale and purchase agreement relating to the acquisition of East Ghazalat.

Nostra Terra said it has seen a copy of the letter sent by TransGlobe to IRE and IRG.

Its understanding, which has been confirmed by TransGlobe, is that TransGlobe has not initiated legal action against IRE, IRG or Nostra Terra.

“Discussions remain ongoing with TransGlobe concerning the production by them of a compliant draft final statement required to calculate the outstanding balance of the loan note issued to TransGlobe by IRE in connection with IRE's acquisition of its interest in the East Ghazalat concession in Egypt,” Nostra Terra’s board said in a statement.

“The terms of the Loan Note and the acquisition were announced by the company on 6 October 2015 and as noted, the principal of $2.5m repayable on the loan note is subject to certain adjustments, which are currently under discussion, and may result in a reduction of the principal amount outstanding.

“Nostra Terra will continue to act in good faith in resolving this matter and will provide a further update to shareholders as and when appropriate,” it added.