Pancontinental Oil & Gas will pay a cash call made by Tullow Oil regarding the management costs of a license offshore Namibia, Offshore Energy Today reported.

The company has previously disputed the claim, and is still disputing it. However, it said early January, the structure of the Joint Operating Agreement requires payment of the cash call first in order to avoid a possible default situation, and then resolution of any disputes later.

Tullow Oil claimed in December 2016 $552,897, representing 35% of operatorship costs supposedly incurred by the company in licence PEL 37 during the 2014, 2015 and 2016 calendar years, as informed by Ecofin Agency. The costs included common exploration costs, exploration license management, Tullow’s local office costs, and non-project general exploration costs.

Pancontinental has expressed belief that Tullow does not have the right to make such a cash call under the terms of the free carry with Tullow and has reserved its rights regarding the matter.

However, for the reasons mentioned above, Pancontinental has offered a staged payment plan, which Tullow has accepted. Pancontinental also stated that “payments are to be made without prejudice to the company’s right to contest the cash call, and the company is considering its position on the matter.”