Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

12. Related Party Transactions

The Company has transactions in the normal course of business with its shareholders, CEHL and their affiliates. The following table summarizes related party transactions for the respective periods (In thousands):

	September 30,		December 31,
	2014		2013
Accounts receivable	$	-	$	1,026
Other current assets	$	624	$	624
Accounts payable and accrued expenses	$	8,897	$	25,721
Promissory Note	$	11,185	$	6,496
Convertible Subordinated Note	$	50,000	$	-

The Company was owed $1.0 million as of December 31, 2013, for billings under the Technical Services Agreement (“TSA”) signed with Allied in January 2013. Under the TSA, the Company agreed to provide certain services related to the Oyo Field within OML 120, in exchange for payments from Allied of $150,000 per month with effect from September 2012. The TSA was terminated as of the closing of the Allied Acquisition in February 2014 pursuant to the Transfer Agreement and subsequently settled as part of an offset of certain liabilities owed to Allied.

The Company was owed $0.6 million as of both September 30, 2014 and December 31, 2013, as a result of an estimated overpayment made for royalty and petroleum profit taxes in Nigeria under the PSC.

As of September 30, 2014 the Company owed $8.9 million to affiliates of CEHL for expenses incurred during the period to support the operations in the normal course of business.  As of December 31, 2013, the Company owed $25.7 million to Allied primarily as reimbursement for costs incurred related to the drilling of development wells in the Oyo Field.

As of September 30, 2014 and December 31, 2013, the Company had total outstanding notes payable balances of $61.2 million and $6.5 million, respectively, owed to Allied. See “Note 7 – Debt”,for details relating to the notes payable transactions.

An affiliate of CEHL, the Company’s majority shareholder, provides procurement and logistical support services to the Company’s Nigerian operations. In connection therewith, the Company incurred $9.9 million and $15.4 million with the affiliate, which includes $1.5 million and $2.9 million over and above the actual cost of goods and/or services acquired as compensation to the affiliate during the three and nine months ended September 30, 2014, respectively.