Heritage Oil Plc (HOIL), a U.K. oil and gas exploration company, rejected press reports that it had lost an arbitration case over tax claims by the government of Uganda.
The company is at odds with Uganda over potential tax liabilities from the sale of oil and gas assets in 2010. The $283.4 million placed in escrow in London in July of that year remains in place, the London-based company said today in a statement.
Heritage slumped 7.1 percent to 165 pence, its steepest drop since August 9, after the New Vision newspaper earlier reported the company lost the arbitration case.
“Heritage is concerned to note that press comments attributed to the Ugandan authorities regarding the arbitral decision are inaccurate as well as being breaches of the requirement of confidentiality imposed upon both parties to the proceedings,” it said in the statement.
The monies were deposited with Standard Chartered Plc (STAN) bank as part of a settlement to allow Tullow Oil Plc (TLW) to complete the acquisition of Heritage’s assets in Uganda. Tullow paid about $1.5 billion to Heritage for its interests in Block 1 and 3A in the Lake Albert basin. The African state withheld final approval of the deal until the capital gains tax issue was resolved.
Heritage is also involved in an appeal in the Ugandan courts after depositing $121.5 million with the African nation government also in July 2010.
Tullow in 2011 paid the Ugandan government $313 million, which the African nation believes it was owed by Heritage as capital gain tax. Tullow has been trying to recover the money in a separate arbitration case, which started in London last month, George Cazenove, a spokesman for Tullow, said by phone.
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