Catherine Dodd, Sheriff of the High Court at New Plymouth, today confirmed legal proceedings against GEL Exploration had been filed, though she said the court was waiting for instructions to proceed further.
Century Drilling and Energy Services Ltd had initiated legal procedures for the recovery of outstanding debts incurred while the Houston-based GEL company was active in New Zealand.
Court bailiffs could, if asked to, execute a writ of sale which would enable GEL assets in New Zealand to be seized, said Dodd. She declined to comment further.
Bankruptcy proceedings against GEL have also been filed by oil services company Schlumberger.
The web of intrigue surrounding GEL and associated companies, such as Titan Resources and Pacific Operating Ltd, may never be fully unraveled, say industry sources.
It is understood some claims of outstanding debts, said to have been incurred by GEL or associate companies, range from as little as $NZ5000 to over $US1 million.
However, there is believed to be only about $NZ50, 000 worth of drilling equipment used by GEL still at storage yards near Port Taranaki in New Plymouth. Also it is unclear exactly which company or companies legally own any assets, and any wrongful seizure by the courts could result in counter law suits.
Industry commentators contacted today had nothing positive to say about GEL, which had interests in several exploration permits in Taranaki and Wairarapa. GEL participated in geophysical work and seismic over most of the permits it was involved in, although the Crusader well on the outskirts of New Plymouth was its sole drilling operation.
"Frankly that news does not surprise me. I have heard nothing positive from the companies I have spoken to during the last year. Everybody who had any dealings with them had absolutely nothing good to say," said one commentator.
It is known GEL "courted" several companies operating in New Zealand, either wanting the companies to farm-in to GEL's licences or wanting to take stakes in their licences.
It is also known some companies ran security-integrity checks on GEL in the United States and were so disappointed with the results they ensured they had no dealings with the company in New Zealand.
Last March Canadian-listed company Pacific Tiger Energy formally announced its departure from the New Zealand exploration scene, citing GEL's failure to meet its joint venture operating agreement obligations as one reason for the Singapore-based company's departure.
Pacific Tiger president Mike Cvetanovic said at the time that PEP 38463 was an exciting exploration area and contained excellent growth portfolio parameters. However, the default of former PEP 38463 partner GEL Exploration Ltd's drilling obligations put Pacific Tiger in a position of having to form a new drilling partnership or fund a high-risk wildcat well by itself.
GEL's sole New Zealand well, Crusader-1 was drilled in PEP 38721 in July, 2000, and encouraging hydrocarbon shows prompted it to later drill the Crusader-1A sidetrack. GEL took a 100% interest in PEP 38721 in July, 1997, and also had a 70% stake in the East Coast Basin permits PEP 38331 and 334.
Another international company to have recent dealing with GEL is US firm Zydant Corp, which says it learned a lesson from its involvement with GEL and the Crusader wells.
While Zydant does not indicate any unlawful activities by GEL, the corporation says it did not realise any return on the over $US400, 000 it invested in the risky business of oil exploration.
Zydant's website says it acquired a 15% interest in PEP 38721, through the settlement of a lawsuit involving Titan Resources (no relation to the Australian explorer of the same name). Zydant Corp invested approximately $US497, 000 in the permit to the fiscal year ending February, 2001. During May 2000, Zydant Corp issued a $US300, 000 note payable to a venture capital firm and used the additional capital to support its 15% working interest in permit PEP38721, for the first exploration well. In August, 2000, Zydant Corp invested $US97,000 of its working capital for the Crusader-1A sidetrack.
"The company does not intend to invest additional capital in this asset and does not intend to pursue further this type of business activity," says the website.
