Tap Oil receives $23m Varanus settlement
27-November-09 by Rebecca Lawson Producer Tap Oil has received a revenue boost after it today reached an unconditional $US21 million ($A23 million) final settlement with its insurers over the Varanus Island gas explosion.
The settlement is compensation for the impact of last year's incident on oil and gas production and sales, as well as the cost to repair damage to the Varanus Island facilities.
Tap had previously received three separate interim insurance payments totaling $US11 million, which are included in the final settlement amount.
The company said the full $US21 million will be recognised as revenue in its financial statements for calendar 2009.
"Tap is very pleased to have been able to reach a final settlement on the claim in relatively quick time and we are very appreciative of the efforts of our insurers, advisors and loss adjusters for the professional and pragmatic way they have conducted the claim since the incident occurred," managing director Peter Stickland said.
"With this settlement and the Varanus Island facility back to capacity, Tap can now ensure its resources are focused on future value creation through its upcoming 2010 exploration drilling campaign."
Tap is currently facing legal action from Burrup Fertilisers over the Varanus Island incident, and has put its maximum liability at $US25 million.