Victoria Oil & Gas plc (LON:VOG) announced this morning that it has reached a settlement with RSM Production Corporation over its disputed Logbaba gas project in Cameroon.
RSM will pay $16.1m of the $26m requested by Victoria following last year’s arbitration, and the balance (or amount to be refunded) will be determined by an independent auditor.
The speed of the deal has surprised me, as I wasn’t convinced that RSM really wanted to pay out this kind of money.
Having agreed a payment on this scale, RSM’s commitment to Logbaba seems genuine — although as I mentioned before, the firm might also be keen to get its hands on two closed-in old wells that could, perhaps, be analagous to the Logbaba production wells.
All notices of default, applications for arbitration and other legal orders have been withdrawn by both parties. You can see the official announcement here.
The deal must be good news for Victoria, as it will provide useful working funds and should remove the distraction of the court case and allow the firm (and potential investors) to be confident in the integrity and viability of its operating business.
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