13 Jan 2014 07:00
13 January 2014
Victoria Oil & Gas Plc (AIM: VOG)
("VOG" or "the Company")
RSM - Default on US$26.0 million of cash calls
The Company announces that RSM Production Corporation ("RSM") has failed to pay two cash calls which were issued by Company subsidiary Gaz du Cameroun ("GDC") on 23 December 2013 (the "2013 Cash Calls"). The first cash call was for RSM's participating interest share of incurred expenses since the end of the First Arbitration (July 2011) for the amount of US$24,044,870 and the second, for the January 2014 advance for an amount of US$1,977,600. Because of this failure to pay by RSM, GDC issued notices of default for each overdue cash call on 10 January 2014.
An ICC ruling handed down in December 2013 (the "Second Arbitration"), following arbitration proceedings brought by RSM, made it clear that RSM must pay its cash calls when due. An initial amount of US$4.1m was paid to GDC by RSM following the December 2013 ruling by the ICC. RSM has now failed to pay the additional amounts of US$26.0m and instead has expressed an intention to take the question of its liability to pay the 2013 Cash Calls to a further ICC Arbitration.
RSM is now attempting to avoid the possibility of forfeiting its participating interest in the Logbaba concession by seeking the appointment of a new emergency arbitrator by the ICC. Its application seeks an order to protect RSM from the consequences of default by preventing GDC from enforcing the forfeiture provisions of the Operating Agreement until the conclusion of the proposed Third Arbitration. GDC is entitled to make representations to the emergency arbitrator regarding the application and its appropriateness following the decision issued in December 2013. The emergency arbitrator should rule on the application in approximately 15 days although this can be extended by the ICC in complex matters.
Kevin Foo, Chairman, said, "The December 2013 ICC ruling made it clear that RSM was allowed to participate in the Logbaba project, but that it must honour its contractual agreement with GDC. We have already received one payment for US$4.1m and will be pressing for RSM to meet its current obligations, so that the full potential of the project can be realised for all stakeholders.
"Victoria Oil and Gas, through its subsidiary Gaz du Cameroon, has built a new African energy company, with production, infrastructure and customers. Throughout this entire period, RSM has chosen to try to avoid making payments towards its obligations at Logbaba. The words from RSM change, but the tune remains the same."
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Kevin Foo / Chane Brooks / Laurence Read Tel: +44 (0) 20 7921 8820
Fox-Davies Capital
Daniel Fox-Davies Tel: +44 (0) 20 3463 5010
Strand Hanson Limited
Angela Hallett / Stuart Faulkner Tel: +44 (0) 20 7409 3494
Tavistock Communications
Ed Portman / Conrad Harrington / Simon Hudson Tel: +44 (0) 20 7920 3150