Shale Drilling Project to Receive $85 Million Investment from Shalco

 

Shalco, with its postal address in London, United Kingdom, is all ready to participate in a joint venture with the Cleveland County, Oklahoma based West Star Exploration and Production Company. The former, through a Delaware subsidiary, is all slated to invest $85 million in this Oak Tree Project. The scheme involves the drilling of about 40 wells in a few Oklahoma lands.

Under reporting

The London based company, however, approached US courts in 2012 and alleged that the expense of such planned wells were significantly under reported by West Star and it would have desisted from such project involvement if it had prior known that the the initial budget was blatantly overstated.

Shalco told the court of its views. It said given the sequence of such disclosures, it was a fair chance that the investment of $85 million will only fund about 20 wells. The company has asked $40 million in unspecified punitive damages.  The allegations were denied by West Star who then put forward a counterclaim. The Cleveland County company said that it never gave guarantee as to the project costs, as they affected by conditions prevailing in the market.

Buying projects

West Star claimed to have been approached by Shalco and the latter wished to buy into this project. The former experienced difficulty when it came to obtain funding from investors. The company said that it had asked for about $5 million in damages. There is also the issue of costs.

The list of shareholders include Sean Mooney, a director and who was also a former KPMG, Dublin partner, and a Shropshire address company, Kavast Limited.

This matter, however, never progressed to trial. Each party agreed to bear its own expenses, as revealed by publicly available documents. When it came to reading the accounts related to Shalco Energy Limited, it is revealed that the company made a 2.1 million GBP loss in 2014.

The previous year (2013), saw losses of 20.1 million. The notes linked to accounts had revealed that the company had sold certain gas and oil interests were sold for shares a cash in 2013. This brings the termination of its joint venture with the Oklahoma Company.  During the US Court Case, it was clearly stated that Dublin was the place where Shalco did business and according to its accounts, the company is a tax resident in Dublin. According to Kavast Ltd, it also have a presence in Bechhantes.

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