Legal Actions

3 Months Ended

Dec. 31, 2019

Legal Actions [Abstract]

LEGAL ACTIONS

12. LEGAL ACTIONS

On October 28, 2019, Provident Premier Master Fund Ltd. (the "Plaintiff"), filed and served an Amended Statement of Claim against Northern Alberta Oil Ltd., Deep Well Oil & Gas (Alberta) Ltd., Andora Energy Corporation and MP Energy West Canada Corp. (the "Defendants") in the Court of Queen's Bench of Alberta Judicial District of Calgary. The Original Statement of Claim had been filed on November 1, 2018 but the Company states that it had never been served so the Company was not aware of it. The Plaintiff claims that on December 12, 2003, Nearshore Petroleum Corporation ("Nearshore") entered into a royalty agreement with Northern Alberta Oil Ltd. ("Northern") in which Northern granted a 6.5% gross overriding royalty ("GORR") in all petroleum substances produced, saved and marketed from six of the Company's oil sands leases located within the Company's Sawn Lake properties. The Plaintiff seeks: 1) A declaration that the Plaintiff is the legal owner of 0.67% of the GORR payable on all oil sands produced from the lands which is payable by one or more of the Defendants; 2) An accounting to determine the amount of the outstanding royalty of which judgment is estimated by the Plaintiff to be in the amount of $100,000 Cdn; and 3) Interest and costs.

The Company continues to deny the validity of the Purported 6.5% Royalty in the first instance. As well, if the Purported 6.5% Royalty was valid, which is denied, it was not a gross overriding interest, but rather an overriding interest, which allowed for the deduction of operating and marketing costs. The Company plans to vigorously defend itself against the Plaintiff's claims. As at December 31, 2019, no contingent liability has been recorded, as a successful outcome for the Plaintiff is not probable.