Primeline Energy Holdings Inc. (CVE:PEH) shares doubled on Wednesday after the company said it had settled the dispute with Zhejiang Natural Gas Development Company Ltd. in relation to the gas sales contract for LS36-1, as the Canadian-listed group also published its third quarter earnings.
Primeline said it will receive approximately RMB 256mln (C$49mln) net of VAT for its share of all outstanding unpaid or partly paid amounts due for natural gas delivered to the end of 2016 and for the 2015 and 2016 take-or-pay payments.
Primeline also agreed to withdraw the CIETAC arbitration against Zhejiang Gas.
Once the settlement payment is received, Primeline will settle its own overdue payment owed to China Oilfield Services Limited (“COSL”) in the order of RMB116mln (C$22mln) in relation to the 2015 drilling contract and COSL will withdraw its arbitration proceedings against Primeline.
The company said that further details will be announced when these settlement transactions are completed.
However, the settlement does not affect or halt the previously announced ongoing arbitration against CNOOC and CCL under the Petroleum Contract in relation to the LS36-1 development and production which was commenced in June 2016 and which is continuing.
Primeline also reported that revenue from oil and gas jumped to RMB 93.8mln, or C$18mln, in the three months to Dec 31 versus RMB 85.9mln in the same period of 2015. In the Nine months to Dec 31, revenue expanded to RMB 181.3mln, or C$34.9mln, from RMB 117.7mln in the same period a year earlier.
The company also recorded a three-month comprehensive loss of RMB 123.9mln versus RMB 105.6mln a year earlier.
Primeline shares were up 92%, or C$0.12, at C$0.25 in late Wednesday trading. The shares more than doubled to C$0.30 intraday.
Story by ProactiveInvestors