LONDON--(BUSINESS WIRE)--RSM Production Corporation (“RSM”) announces its intention to dispute a cash call request by Victoria Oil & Gas (“VOG”) for $26m relating to RSM’s interest in the Logbaba Concession in the Republic of Cameroon.
RSM confirms that it has made an application to the International Chamber of Commerce (“ICC”) for emergency measures to defend against VOG’s notice of default and enter arbitration concerning the cash call.
This action follows RSM’s recent success in the ICC in December 2013 when it defeated earlier attempts by VOG to acquire RSM’s interest.
Jack Grynberg, President of RSM said: "The ICC confirmed RSM's 40% interest in the Logbaba Block. VOG's claimed cash calls are invalid and vastly over inflated. This predictable and wrongful demand by VOG is damaging to the project and to RSM's interests. RSM intends to find out exactly what VOG has been spending shareholders' money on and RSM will not be paying any improper, unauthorised expenditure."
RSM was excluded from the operational management of the asset from August 2011 until November 2013 during which time they approved a work programme and budget. RSM does not accept that it is liable for the $26m that VOG asserts it is owed as a result. RSM views the sum requested as invalid and designed to force it to default and forfeit its holding.
In arbitration, RSM will also seek an order that cash calls should be made in accordance with RSM’s rights under its Operating Agreement, including the right to attend and vote on the Operating Committee and approve work programmes and budget.
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Notes to the editor |
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Timeline of events |
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| 31 May 2001 | The Logbaba Concession is granted to RSM by the Republic of Cameroon | ||
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30 November 2013 |
ICC Tribunal confirms RSM's 40% interest in Logbaba Concession and that VOG's allegation of forfeiture is wrong | ||
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23 December 2013 |
VOG issues cash calls. The first cash call is alleged to be for RSM’s participating interest share of incurred expenses since the end of the first arbitration (July 2011) - $24,044,870. The second is for a January 2014 advance for $1,977,600 | ||
| 20 January 2014 | RSM applies for injunctive relief not to have to pay the cash calls; and seeks ICC arbitration of the validity of the cash call for expenses incurred since 2011 | ||
About Jack Grynberg
Jack J. Grynberg is the President and CEO of RSM Production Corporation. He is an eminent and highly experienced expert in the fields of hydrocarbon research, exploration, development and production. He has been resolute and highly successful in defending his and his family's companies' interests where necessary through negotiation, arbitration and other litigation.
About RSM Production
RSM Production Corporation (RSM) operates as an oil and gas exploration and production company. The company was incorporated in 1996 and is based in Denver, Colorado. RSM owns a 40% interest in the Logbaba Concession.
About Victoria Oil & Gas
Victoria Oil and Gas plc (VOG) is an AIM listed oil and gas exploration and production company with assets in Africa and the FSU. The company's principal assets are the Logbaba gas and condensate project in Cameroon and the West Medvezhye project in Siberia, Russia. VOG Chairman is Kevin Foo.
Background
The Logbaba Concession was granted to RSM by the Republic of Cameroon on 31 May 2001. On 9 August 2006 RSM assigned an interest to a VOG subsidiary, which was approved by Cameroonian Presidential Decree on 29 November 2006. It is a matter of contention as to whether the assignment was of a 50 per cent interest or a 60 per cent interest in the Concession. In 18 July 2011, VOG asserted that pursuant to the provisions of an operating agreement between the parties, RSM had forfeited to VOG its remaining interest. This assertion is disputed and is subject of ongoing and protracted Arbitration between the parties.
In July, 2011, VOG refused to accept RSM's payment of an outstanding $4,100,000 forcing RSM to demand arbitration. RSM rejected VOG's claims that RSM had forfeited its interest in the Logbaba Development and the Government of Cameroon has not approved the transfer of RSM's remaining interest in the Logbaba Development to VOG. A Republic of Cameroon Presidential Decree executed on 3 December 2012 confirms RSM's interest.
RSM also has an International Centre for Settlement of Investment Disputes (ICSID) claim against the Republic of Cameroon which is proceeding to arbitration. The case was registered on 1 July 2013 and a first hearing is expected early this year.