Victoria Oil & Gas plc (VOG) said its financial situation was precarious after being ordered to pay $12 million to its partner, suspension of trading, and its inability to raise funds until a resolution is found.
OPERATIONS
The company’s wholly owned subsidiary Gaz du Cameroon S.A. (GDC) produces and distributes onshore gas in the port city of Douala in Cameroon.
TERM SHEET
Earlier this year, the International Chamber of Commerce (ICC) made the award to project partner RSM Production Corporation over legacy issues, leading to a suspension of trading.
The company today said it had held recent “cordial and constructive” face-to-face discussions in the United States.
“A framework for settlement has been proposed with a view to signing a term sheet this month, though there can be no guarantee of concluding this or subsequent legal documentation leading to an agreement,” added VOG in a statement.
The partners in the Logbaba project continue to work together to maximise the value of the Logbaba field.
DEBT FINANCING
VOG said that until it reached a resolution with RSM, the company was unable to raise funds via the equity markets.
“In addition, given the debt level and material uncertainty with respect to the ICC Award, it is practically impossible for the company to raise debt financing.
“The parent company is therefore currently wholly reliant on internally generated funds, the receipt of which vary in quantum and timing.
“As a result, the financial position of the company is precarious.”
CREDITORS
VOG added it remained in regular communication with its creditors, including major shareholder and loan note holder, Hadron Master Fund.
“[Hadron] remains supportive of the management team’s efforts to resolve the financial situation of the company and has re-confirmed its support.”
VOG said it would make a further announcement to shareholders later this month.