Modiin problems deepen as Adira pulls out of Gabriella

A week ago, the third licensee, Canada's Brownstone Energy announced that it would not deposit is share of the letter of credit for the drilling.

Canada's Adira Energy Corporation (TSXV: ADL; Bulletin Board: ADENF; XETRA: AORLB8) has notified exploration license, Modiin Energy LP (TASE:MDIN.L) that it will not continue providing services and equipment for the well in the Gabriella license. The announcement comes a week after the third licensee, Canada's Brownstone Energy Inc, (TSX: BWN; Bulletin Board: BWSOF) announced that it would not deposit is share of the letter of credit for the drilling.

Adira notified Modiin Energy that it was terminating all the agreements and arrangements for receiving services and for the delivery of equipment and goods for the exploration plan. It added that to minimize further financial damage to Modiin Energy, it would supply some critical services for the rig through February 12.

In response, Modiin Energy notified Adira and Brownstone that they were violating their commitments under the partnership agreements in the Gabriella license. Last week, Adira and Brownstone notified Modiin Energy that they would not deposit their shares of the letters of credit to the drilling company, Noble Corporation (NYSE: NE), amounting to $5 million and $10 million respectively.

Modiin Energy owns 70% of the Gabriella license, and Adira and Brownstone own 15% each.

Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2013

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

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