Vanoil Energy Ltd.
TSX VENTURE : VEL

Vanoil Energy Ltd.

October 01, 2014 09:15 ET

Vanoil Commences International Arbitration Against the Government of Kenya

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 1, 2014) - Vanoil Energy Ltd. (TSX VENTURE:VEL) ("Vanoil" or the "Company") has commenced an international arbitration against the Government of Kenya (the "Respondent"). This action has been filed to resolve a dispute arising from the Respondent's breach of the Production Sharing Contracts (the "PSCs") for Blocks 3A and 3B.

Vanoil commenced drilling operations at the Madogashe-I drill site (Block 3A) in Kenya prior to July 31, 2013, as part of the Company's commitment specified in the amended PSCs for Blocks 3A and 3B. The Company was unable to drill, however, because drill site operations were significantly impaired by a number of incidents of local disturbance and unrest. The Company was directed by local government authorities to reduce and then delay operations until a safe return to the site could be provided. The Company's decision to proceed with a formal arbitration demand follows prolonged discussions with Kenyan officials regarding an extension of the PSCs for Blocks 3A and 3B in order to accommodate the lengthy delays experienced at the drill site and give the Government of Kenya sufficient time to provide Vanoil with secure and safe access to its site, in order to complete its two-well program.

Vanoil is seeking not less than US$150 million as full and proper restitution for its seven years of exploration and development, based upon the net present value of its investment in Kenya, to which it is entitled under the PSCs.

On behalf of the Board of

VANOIL ENERGY LTD.

James Passin, Chairman

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward Looking Information

This news release includes forward-looking statements that are subject to assumptions, risks and uncertainties. Statements in this news release which are not purely historical are forward-looking statements, including without limitation any statements concerning the Company's intentions, plans, estimates, beliefs or expectations regarding the future. Although the Company believes that any such intentions, plans, estimates, beliefs and expectations in this news release are reasonable, there can be no assurance that any such intentions, plans, beliefs and expectations will prove to be accurate.

The Company cautions readers that all forward-looking statements, including without limitation those relating to the Company's future operations and business prospects, are based on assumptions that cannot be assured and are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated in the forward-looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance on forward-looking statements.

Any forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual events or results could or do differ from those projected in the forward-looking statements. The Company assumes no obligations to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Vanoil Energy Ltd.
    Sam Malin
    CEO
    + 44 7624 392 045

    Vanoil Energy Ltd.
    Malcolm Burke
    +1 605 689 1515 x 108

    Vanoil Energy Ltd.
    Scott Rose
    +1 604 684-1974 x 227
    info@vanoil.ca
    www.vanoil.ca