Background

Breach of Share Purchase Agreement warranties following the sale by an oil major of its operations in Sub Saharan Africa to a private equity buyer.

Our Role

Secretariat professionals provided expert services in assessing whether accounting warranties had been breached and assessing the quantum of loss arising from accounting, tax and other alleged breaches of warranties.

Outcome

We were instructed by the Respondent to respond to allegations of breach of warranties under accounting warranties and tax warranties and the assessment of damages for all alleged warranty breaches. The work involved obtaining a detailed understanding of the operation of the various joint operating agreements and production sharing contracts in force. Key areas of focus were the assessment of materiality; the valuation methodology; weighted average cost of capital and multiplier; expectations when operating in the specific country where there is frequent government intervention; and an assessment of damages.