Modiin's Gabriella partners refuse to fund drilling

Adira Energy and Brownstone Energy accuse Modiin Energy of being in breach of the partnership agreement for the license.

Modiin Energy LP (TASE:MDIN.L) today announced that its partners in the Gabriella license, Canada's Adira Energy Corporation (TSXV: ADL; Bulletin Board: ADENF; XETRA: AORLB8) and Brownstone Energy Inc. (TSX: BWN; Bulletin Board: BWSOF), have rejected its demand that they deposit their share of the credit lines for the rig operator drilling a well at the license, Noble Corporation (NYSE: NE).

Modiin Energy said that Adira notified it that it will not deposit its share of the letters of credit, and Brownstone notified it that it does not have to do so, because Modiin Energy is in violation of the partnership agreement in the license.

Modiin Energy said that it rejects Adira and Brownstone's claims that it is in breach of the agreement. The company says that Adira and Brownstone are in breach of the partnership agreement by not depositing their shares of the letters of credit ($5 million each).

Yesterday, Modiin Energy announced that Noble Corporation gave it 48 hours to deposit the $21.1 million balance of the letters of credit, or it would suspend drilling the well in the license.

Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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