Tuesday, July 19, 2011
Victoria O&G plc
Victoria O&G has increased its effective working interest in the Logbaba gas and gas condensate field in Douala, Cameroon ("Logbaba Concession") to 95% following the serving of a Notice of Forfeiture on July 18, 2011 on RSM Production Corporation ("RSM") which previously had a 38% interest in the Logbaba Concession.
The activities at the Logbaba Concession are regulated by a number of legal agreements between VOG's 100% subsidiary Rodeo Developments Limited ("RDL") and RSM which cover various operating and legal matters including the obligation for RSM to meet appropriately evidenced cash calls raised by RDL for the costs of development and operation at the Logbaba Concession.
RSM failed to make payment under a cash call made on June 15, 2011, and a notice of default was served on July 2, 2011. As RSM failed to rectify the default, RDL has served Notice of Forfeiture in accordance with the Operating Agreement ("Agreement") between RDL and RSM. The effect of this is to require RSM to withdraw from the Agreement and transfer RSM's former interest to RDL.
As announced on 6 May 2011 Societé National des Hydrocarbures, ("SNH") has indicated that it intends to exercise its right to take a 5% participation in the Logbaba Concession, and will pay its share of development costs. Following the forfeiture VOG, through RDL, will have a 95% interest and SNH will have the remaining 5% interest.
Kevin Foo, Chairman of VOG commented, "We are disappointed to be in the position where we have had to take this step, but it is important for all participants to meet their obligations at Logbaba, not just VOG. We look forward to working with SNH to drive this project forward to first gas later this year."
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