07:24 AM EDT, 05/13/2024 (MT Newswires) -- Alvopetro Energy ( ALVOF ) , which rose 3.2% on Friday, earlier Monday said the emergency arbitrator has granted its request to approve the decision of the independent expert appointed by Alvopetro and its third-party partner to redetermine stakes in the Cabure natural gas field in Brazil.

The independent expert had found for Alvopetro, increasing the company's stake in the unit to 56% from 49%. The partner disputed the decision, after which Alvopetro filed an emergency arbitration request before the International Chamber of Commerce seeking an injunction to make the decision effective from June 1. Alvopetro also requested compensation for damages and reimbursement for costs. The expert denied Alvopetro, but found the partner liable for 70% of the costs incurred by both parties, with Alvopetro picking up the tab for the remaining 30%.

The provisional and contingent measure is valid until reviewed by an arbitral tribunal, the company said, adding that it has filed a request for full arbitration.

Alvopetro will now request that its partner register the redetermined working interests.

The Cabue natural gas discovery extends across two blocks with two adjacent blocks owned by another company. Under Brazilian law, petroleum straddling two or more licensed blocks must undergo "unitization," or pooling, to ensure efficient and fair development. Under the 2018 Unit Operating Agreement, Alvopetro's initial working interest share of the unitized area was 49% with the company's partner named initial operator with the remaining 51%. The working interest split was subject to redeterminations.

On April 5, an independent expert appointed by Alvopetro and its partner found in favour of a proposal by Alvopetro's that increased the company's working interest in the unit to 56%, effective June 1. Alvopetro's entitlement to natural gas production from the unit would increase to 13.9 MMcfpd per day (before additional natural gas liquids volumes), compared with average 2023 natural gas production from the unit of 11.7 MMcfpd per day.