re: bassgas status update BASSGAS STATUS UPDATEClough Limited...

re: bassgas status update BASSGAS STATUS UPDATE

Clough Limited has released progress statements on September 24th and November 10th to advise the status on the BassGas project. This update is intended to provide further information on the project to shareholders. Clough yesterday served a Notice of Dispute upon the client, a joint venture operated by Origin Energy Resources Limited, pursuant to the dispute provisions of the contract.
In the Notice of Dispute Clough claims, amongst other things:
• that at the time that contract was being entered into, the client made various representations to Clough that constitute false and misleading conduct contrary to
Section 52 of the Trade Practices Act. These representations related (a) to the conduct of the client’s Project Manager and (b) to an undertaking to jointly identify and implement cost savings
• that the purported imposition of liquidated damages by the client is wrongful
• that the client’s Project Manager has not acted honestly and fairly as required under the contract and
• that the refusal by the client’s Project Manager to approve extensions of time, delay costs and adjustments to the contract price, is wrongful.

Clough has sought a declaration that the contract be set aside, in addition to quantified monetary claims of $25 million, further general damages and damages under the Trade Practices Act, and extensions of time of more than 150 days.
Origin has previously said it disputes the claims and has previously threatened Clough with the termination of the contract. In Clough’s view, the grounds for termination set out in the threat by Origin were spurious and Clough have sent an exhaustive response
refuting each and every point.
“It is very rare for Clough to proceed down the legal path and we still always prefer to settle these sorts of issues by discussion and negotiation,” said David Singleton, CEO & Managing Director of Clough Limited. “However, the continuing conduct of our client,
which goes well beyond what we have seen before, has left us no option. We will pursue our claims very vigorously and ensure that we recover all that we are entitled to.”

Clough will provide further updates as the project and the legal action proceed.

Origin Energy Resources Limited is the BassGas project operator (32.5%), in joint
venture with AWE Petroleum Pty Ltd (30.0%), CalEnergy (Australia) Limited (20%),
Wandoo Petroleum Pty Ltd (12.5%) and Origin Energy Northwest Limited (5%).