Victoria Oil & Gas : RSM and VOG Arbitration

VOG notes a recent media article in Cameroon and can confirm that on 22 July, 2016, RSM Production Corporation ('RSM') filed a request for arbitration with the International Chamber of Commerce ('ICC') regarding the rig and drilling contractor selected by VOG to conduct the drilling of two new wells at the Logbaba project. Separately, on 29 July, 2016, RSM filed a complaint and application for injunction with the U.S. District Court for the Southern District of Texas in which RSM sought a temporary court order to halt the drilling operations while the arbitration proceeds. On 12 August 2016, VOG and its subsidiary, Gaz du Cameroun, responded to RSM's application for injunction, pointing out that RSM has approved the operations (including the rig and drilling contractor), the rig was in Cameroon being assembled, and therefore an injunction was not warranted. On 16 August, 2016, RSM withdrew the request for injunction and dismissed its complaint.

The arbitration is still pending. 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.

Activity on the approved 2016 Work Program and Budget continues with spudding of the two wells imminent. GDC is well placed to continue funding these operations and the drill program with project revenue and bank debt until such time as the arbitration with RSM concludes.