Page 78 - Sun Resources Annual Report 2013

23 Interest in Joint Venture Operations
The consolidated entity’s share of assets employed in joint ventures, referred to in the “Review of Activities” set
out on pages 9 to 19 and in the “Tenement Directory” on page 20, are included in the Consolidated Statement of
Financial Position under the classifications shown below. The joint ventures do not have separate books of account
and relate solely to contribution/interest in a well or expenditure on an area of interest. This is distinct from operating/
producing joint ventures, which have assets and liabilities. Please refer to “Tenement Directory” for details of the
Company’s percentage interest in each joint venture area.
Consolidated
2013 2012
$ $
Oil and gas properties 59,212,806 16,720,865
24 Contingencies
Contingent Liability
The new operator Amerril Energy LLC initiated an audit of the work completed up to the operatorship changeover
date by the previous operator of the Beeler (Richland) Oil Project, Richland Resources Corporation (“Richland”). This
audit provided the Company with a detailed assessment from a qualitative and quantitative perspective of the work
undertaken by the prior operator in respect of the Beeler Oil Project.
The Company has become aware of the existence of claims of non-payment from a number of contractors who may
have provided products or services to the prior operator of the Richland Oil Project. Those claims are mainly directed
at Richland. The Company has received legal advice from its US lawyers that under US law there is the potential for
any proven unpaid creditors of Richland to lodge liens over the leases that comprise the Richland Oil Project in an
attempt to secure payment of any outstanding amounts owed by Richland. Such liens have been lodged and there
is currently ongoing legal action in relation to these liens in the US. The Company has issued a general denial in
relation to any claims made against Sun Delta Inc.
From the perspective of a liability, should such liens have validity and remain undischarged, then in order to
discharge any such liens the Company may have to satisfy any such proven claims by paying the Company’s
proportionate share. Assuming the need to discharge any such liens the Company’s maximum liability would be
$2,500,000. The current liability of the Company is nil.
The Company is currently investigating whether and to what extent it may be liable for these amounts and will advise
shareholders as soon as it is able to determine these issues.
SUN RESOURCES ANNUAL REPORT 2013 76
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS