Firm asks court to wind-up Prime Exploration and Production over alleged $36.49m debt

Mutual Benefits Assurance Plc, along with its affiliate, Mutual Exploration and Production Limited, has filed a winding-up petition against oil and gas company, Prime Exploration and Production Limited over an alleged outstanding debt of ₦10.06 billion and $36.49 million.

The petition, lodged at the Federal High Court in Lagos, is based on a consent judgment delivered on November 13, 2023, which confirmed Prime Exploration’s liability to the petitioners. The debt stems from multiple loans and advances disbursed by Mutual Benefits Assurance, with interest calculated as of February 28, 2025.

In an affidavit deposed to by Inyene Docars Ntuk, Legal Manager of Mutual Benefits Assurance, and filed through Gboyega Oyewole (SAN), the petitioners allege that Prime Exploration and Production Limited has repeatedly defaulted on payment, despite both legal and out-of-court attempts at resolution.

The original judgment placed the debt at ₦5.7 billion and $27.7 million, with a 15% annual interest rate on the naira component starting from January 2022. Due to continued non-payment, the total indebtedness has since increased significantly.

The petitioners are now asking the court to wind up Prime Exploration and Production Limited in accordance with Sections 571(d), 572(a & b), and 573(1)(b) of the Companies and Allied Matters Act 2020, citing the firm’s inability and refusal to settle its debts.

In response, the respondent filed a counter-affidavit, arguing that the winding-up request is premature and abusive. They claim the debt is contingent and not yet enforceable.

A litigation executive from the legal team representing Prime Exploration stated that the consent judgment ties payment to the fulfillment of three conditions, including an unresolved audit of cash call obligations dating back to 2008.

The firm contends that Akintola Williams Deloitte was engaged to assess those obligations, and until that process is completed, no payment or set-off can be determined. Consequently, Prime Exploration argues that Mutual Benefits may not qualify as a creditor at all, pending the audit’s outcome.

The oil firm has asked the court to dismiss or strike out the petition, describing it as a deliberate attempt to harass and tarnish the company’s reputation, contrary to the spirit of the consent judgment.

The case is yet to be heard, but the legal standoff between the two corporate entities could have far-reaching implications. If the court grants the petition, it could lead to the dissolution of Prime Exploration and Production Limited, potentially disrupting operations in Nigeria’s oil and gas industry.