Victoria Oil & Gas Plc announces that the Company and its operating subsidiary, Gaz du Cameroun SA ("GDC") have signed a Settlement Agreement with RSM Production Corporation ("RSM") in relation to the Logbaba gas project in Cameroon operated by GDC.
- US$16.3m paid by RSM towards the cash call for expenses issued by GDC on 23 December 2013 with agreement for an audit to determine the final balance payable by or to be refunded to RSM.
- The audit will be undertaken by an independent auditor, jointly instructed in accordance with the terms of the Operating Agreement. The audit is to commence in Q1 of 2014 and be completed within 90 days.
- RSM's Emergency Application to the ICC and Third Arbitration Request have been withdrawn.
- The Notices of Default served by GDC on RSM have also been withdrawn.
- The 2014 Work Program and Budget have been deemed approved by RSM with RSM to pay its share of cash calls for 2014 in accordance with the parties' Operating Agreement upon completion of the audit.
As announced on 13 January 2014, RSM sought the appointment of a new emergency arbitrator by the ICC to obtain an order protecting RSM from the consequences of default for non-payment of the pending 2013 Cash Calls. These cash calls were issued for RSM's participating interest share of incurred expenses since July 2011 (US$24,044,870) and an advance for January 2014 (US$1,977,600).
The Order applied for was to prevent GDC from enforcing the forfeiture provisions of the Operating Agreement until the conclusion of the proposed Third Arbitration. Since that application has been withdrawn, no order will result and the process is at an end.
Kevin Foo, Chairman said; "RSM have worked very constructively with us to find a solution. The agreement now allows all partners to concentrate on developing this outstanding asset.