Leni takes Mediterranean fight to the courts

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LONDON (ShareCast) - Leni Oil and Gas has started legal proceedings against Mediterranean Oil and Gas (MOG), claiming it was misled into selling its interest in a Maltese oil field.

In July 2012 Leni sold its 10% interest in Malta Area 4 PSC to MOG for $1 plus liabilities.

MOG subsequently entered into a farm-in agreement with Genel Energy (Other OTC: GEGYF - news) for $10m in cash and a two-well commitment on Malta Area 4.

Leni's management claim they made it expressly clear to MOG, before entering into sale negotiations, that the company would not sell its interest in the site if 3D seismic analysis indicated Cretaceous prospects.

The firm also maintains it would not have sold its interest had it been aware of interest from Genel Energy or other potential farm-in partners.

"We have repeatedly asked MOG to answer simple questions explaining the facts at the time the company agreed to sell its interest," said Chief Executive Neil Ritson.

"Since we have not had what we regard as satisfactory answers, Leni's board has found itself with no option but to seek relief through the courts," he added.

On 21st December MOG told the markets drilling plans for the first exploration well at Malta 4 were progressing and it would begin testing by the end of 2013.

Today's news sent Leni's shares up 9% by 1400, while MOG's shares fell 2.4%.