Reserve Bonus and 1.2% Contingent Payment Agreements Extinguished
Victoria Oil & Gas today is pleased to announce that its wholly owned subsidiary Gaz du Cameroun S.A, a BVI company (“GDC”) has entered into a confidential settlement that resolves all outstanding issues concerning the previously disclosed Reserve Bonus Payment Agreement (“Reserve Bonus”) and a 1.2% royalty due pursuant to the Contingent Payment Agreement (“CPA”) agreed prior to VOG’s involvement with the Logbaba Gas Project (“Settlement”).
As previously reported in the Company Report and Accounts to December 2015, GDC was in arbitration over the timing and quantum of the Reserve Bonus. The Company is pleased to announce that during a formal mediation process with its counterpart GDC agreed not only a global Settlement, including all claims in arbitration and termination of the Reserve Bonus, but also took the opportunity to negotiate termination of the CPA. The commercial terms are subject to a confidentiality undertaking, but are not materially different from the combined provision and contingency announced in the Company Report and Accounts to December 2015.
Commenting today Ahmet Dik, CEO of VOG, said; “We are very pleased with the Settlement, which draws to a conclusion an area of uncertainty within the business, without putting undue pressure on the Group’s financial resources. The termination of the CPA as part of the Settlement is a significant benefit to shareholders in terms of future profitability. The Board and I continue to look for areas to take costs out of the business and improve returns for shareholders.”