arturus capital - kaput, page-11

Hi Col94
From
Quarterly Activities and Cash Flow Report
Dated 31/01/2012

“During the quarter, the Company attempted to have a legal case dismissed by summary judgment but was unsuccessful. The opposing party also had their motion for summary judgment denied. The case relates to a prior option agreement between a private party in Texas and a wholly owned US domiciled subsidiary of Arturus Capital Limited (ASX:AKW), the entity that the Company purchased the four Permian Basin leases from and it is expected that the case will commence in Texas sometime in 2012.
The US based party is seeking to transfer the option agreement between themselves and the subsidiary of AKW to a US domiciled subsidiary of the Company. The agreement would entitle the party to a 25% back in to the project (after all costs are recovered) and operatorship of the project. The Company strongly believes that the option agreement does not transfer with the acquisition of the leases. In addition the company has an indemnity with AKW to ensure that the Company receives a 100% working interest in the leases that the Company purchased from AKW.”