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VOG to proceed with drilling despite latest legal challenge by RSM

Published: 07:43 26 Aug 2016 BST

gavel and scale of justice
It is the latest in a number of disputes between VOG and RSM

Victoria Oil & Gas plc (LON:VOG) has given investors details about an arbitration process with RSM Production Corporation, which is a stakeholder in the Logbaba field.

A prior battle between VOG and RSM resulted in the latter being reinstated as a partner in the field. There have been a number of disagreements between the parties relating to the investments into the field and the payment of cash calls for the operations.

The AIM quoted company in a stock market statement today acknowledged a recent media report and confirmed that RSM filed a request for arbitration with the International Chamber of Commerce (ICC) in relation to VOG’s selected rig and drilling contractor for a two new well programme at the Logbaba.

It also noted that RSM separately filed a complaint and application for injunction with a US court seeking a temporary court order to halt the drilling operations while the arbitration proceeds.

Subsequently, RSM withdrew the request for injunction and dismissed its complaint.

“The arbitration is still pending,” VOG said in the statement.

“Arbitration in the ICC is a confidential process, VOG is not permitted to comment on it, beyond saying, as it did in its response to RSM's application for injunction, that RSM approved the 2016 work program and budget including the drilling program in question and there is no basis to challenge the choice of the rig or drilling contractor.”

VOG meanwhile highlighted that the drill rig was currently in Cameroon, being assembled, and the spudding of the two wells is now imminent.

It added that the GDC operating subsidiary remains well placed to fund drilling operations from project revenues and bank debt, until such time as the arbitration with RSM concludes.

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