Algerian state oil company Sonatrach said on Thursday it has terminated a 2004 contract with Petroceltic PLC, which was later bought by Sunny Hill Energy, for exploration and production in the Ain Tsila gas field.

It said in an emailed statement that the termination was in accordance with the contract, and that it had taken the step after Petroceltic failed to comply with contractual obligations.

Sunny Hill said in a statement that it intends to pursue legal action to compensate it for the loss, which it values at over $1 billion, after having invested hundreds of millions of dollars in the project.

source: Reuters