Exploration company Providence Resources is to pay Transocean Drilling UK $1.1m in relation to a court case brought by Transocean over the use of a drilling unit on the Barryroe oilfield, offshore Ireland.
This followed a judgement by the Commercial Court in London yesterday.
The court said that Transocean was entitled to its costs of the first instance proceedings, which were on a standard basis.
The court added that the other Part 36 cost-consequences in relation to obtaining costs on the indemnity basis, interest on costs and the principal sum and the surcharge of £75,000 did not apply.
Based on the judgement, Providence said it would pay Transocean a gross sum of about £1.1m in respect of all outstanding costs, interest and principal sums.
This compared with the estimated figure of $3.9m in the company's interim results.
In coming to his conclusion, the judge found that it would be unjust to apply the full Part 36 costs consequences in the circumstances of this case, including his previous criticisms of Transocean's conduct which he said "was not merely unreasonable but dishonest".
"This is a very positive result for Providence, with significantly less cost exposure than had been provided for, justifying our defence of our position," commented the company's CEO Tony O'Reilly.
"With this matter now behind us, our focus remains on unlocking the value within our extensive asset portfolio offshore Ireland, with a particular emphasis on the farm-out processes for Barryroe and Spanish Point as well as completing our preparations for the drilling of Druid next June," Mr O'Reilly added.
Davy analyst Job Langbroek said the news that Providence and its partner will save $2.5m in legal costs is positive in that it preserves more of the capital raised earlier this year for where it should be spent - to create shareholder value in the Irish offshore.
