News ReleaseAs I mentioned a while back, if I recall correctly Govenment lawyers advised they would lose an arbitration hearing. Keeping in mind that EOM (Greystar) has spent $280 USD just on drilling. Overall expenditures exceed $300 million USD by a long shot. Well over 14 years of approved drilling and continual land grab by the Government along with arbitrary conditions that restricted EOM operations will not be difficult to prove to any court.
Through their own intransigence the Government has put themselves between a rock and a hard place. Even if they choose not to compromise and reach a settlement with EOM, the least cost to them under arbitration would be the overall company good faith expenditures exceedingo $300 USD. If damages were awarded that could increase dramatically. It is not brain surgery to calculate almost $3 USD per share on a basic settlement.
it is appearing obvious that the Gocernment plan was likely to procrastinate and make it so difficult for EOM that existing permits expire and the property would be taken over by the Government.
Finally, we have a line in the sand. We may indeed have a negotiated resolution, which would certainly be positive. If not, EOM has given Colombia enough rope that they have hung themselves.
The impact on the SP will be interesting, so will the Government response. They may very well have been blindsided. Instead of making billions of dollars in revenues, they will be paying out a considerable amount. Not to mention the damage to their strategy to encourage international investment.