Horizon Oil says an independent review has cleared the company of wrongdoing regarding a $15 million payment in Papua New Guinea nine years ago.
Horizon in February terminated the employment of chief executive Michael Sheridan and hired Herbert Smith Freehills and Deloitte to investigate after the Australian Financial Review published a series of articles about the transaction.
One of the stories said that lawyers working on the 2011 deal had raised concerns about “illicit payments” and “bribes” over the payment to a PNG shell company, which was made 10 weeks after Horizon was issued a lucrative development licence in PNG.
Horizon on Tuesday said the two firms had now concluded their investigation and found no breach of any Australian law related to foreign bribery.
“The 2011 transaction was undertaken to advance Horizon’s legitimate business interests in PNG,” the company said.
Specifically, Horizon said it paid the $US10.3 million ($A15 million) to the local shell company, Elevala Energy, to buy out its stake in the development licence.
“Horizon confirms that the structure of the transaction and the quantum of the purchase price paid by Horizon was consistent with market practice and comparable to other relevant transactions at the same time.”
Chairman Mike Harding said the ‘”disclosure and publication of company information without seeking to fully understand the facts around a transaction occurring more than eight years ago has caused significant loss to shareholders and cost to the company”.
Horizon saw its share price plunge from 12 cents to eight cents after the AFR story was published.
Mr Harding said that following the “challenging few months,” Horizon was now focused on regaining the confidence of its stakeholders.
At 1148 AEDT its shares were up 10.1 per cent to 7.6 cents.