Grynberg: Investors in Victoria Oil and Gas are Right to Raise Questions

LONDON, March 1, 2013 /PRNewswire/ --

Mr Jack J. Grynberg, President and CEO of RSM Production Corporation (RSM), has responded to queries seeking further clarification about his dispute with Victoria Oil & Gas plc (VOG) regarding the ownership of rights in the Logbaba Concession following RSM's press releases on 26^th and 27^th February 2013.

He said today:

"Investors are right to raise questions about what they have been told by VOG and should be aware of the extent and nature of RSM's grievance with VOG. VOG is purporting to sell them shares in RSM's assets. 

"We dispute VOG's claims that RSM has somehow 'forfeited' ownership rights of the Logbaba Concession and see this as a deliberate attempt by VOG to deprive RSM of its legitimate interests. We dispute that the alleged event of default occurred and this is the subject of the arbitration which will be determined in June. Once again, I draw investors' attention to the Cameroonian Presidential decree of 3 December 2012, which clearly states that RSM has a 38 per cent interest in the Concession. We have every reason to be confident that the arbitration will rule in RSM's favour and will continue to take such steps as are necessary to protect our interests, through to the conclusion of the arbitration and beyond.

"Investors should also be aware of RDL's wrongful relinquishment of a portion of the Concession property back in 2011. The area granted for exploration by the original Concession Contract, negotiated by and issued to RSM, was approximately 64 square kilometres. Contrary to RSM's instructions and contractual rights, RDL unilaterally applied for a subsequent exploitation licence for only 22 square kilometres, relinquishing 42 square kilometres of the Logbaba Concession back to the Republic of Cameroon. On July 13, 2011, prior to any notice of forfeiture being served, RSM learned that RDL had excluded RSM from its application for an exploration license for the 42 square kilometre area within the Logbaba block and therefore gained a new licence solely for RDL. This was a deliberate move to disentitle RSM from its right to participate in the exploration of this area and provides the grounds for a further legal action.

"RSM created the Logbaba Concession opportunity and will not be pushed out by the activities of VOG and its Chairman, Kevin Foo."

Notes to Editors:

• 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 through litigation. He has previously been involved in litigation against a number of companies and representatives in the oil and gas industry. In 2008 he named BP and its former chief executive Lord Browne of Madingley in a lawsuit alleging bribery of government officials in Grenada. Concurrently, he also sued BP and its - at the time - current and former chief executives Tony Hayward and Lord Browne over allegations of bribery of government officials and racketeering in Kazakhstan, as well as Norway's Statoil and its chief executive, Helge Lund.

• 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. The fact is that RSM owns at least a 38 per cent (and possibly a 47.5 per cent) interest in the Logbaba Concession.

• RDL Farmout for RSM called for the drilling and completion of two (2) wells to a depth of 12,000 feet by June 1, 2010. RDL and VOG did not drill to 12,000 feet and did not complete the two (2) wells until the end of 2010. RSM contends (not withstanding its interests of 38 per cent and possibly a 47.5 per cent) that VOG is therefore in breach of the Farmout and is entitled to nothing,

• 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 false and disputed and is subject of ongoing and protracted Arbitration between the parties.

• RSM rejects VOG's claims that RSM has 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 states that RSM owns a 38% interest in the Logbaba Concession.

Presidential Decree

The Presidential Decree of Concession executed on 3 December 2012, amended the 29 November 2006 decree which erroneously stated that VOG - and not its 100% subsidiary Rodeo Development Limited (RDL) - held a direct 57% interest and RSM owns a 38% interest. The decree provides as follows:

A valuable Gas Concession called 'Logbaba' has been given to an association of these companies: NATIONAL PETROLEUM COMPANY (SNH) (PO Box 955 Yaounde), RODEO DEVELOPMENT LIMITED (PO Box 128 Douala), and RSM Production Corporation (5000 South Quebec Street, Suite 500, Denver, Colorado 80237-270 USA), each company having an undivided interest as follows:

• Rodeo Development Limited ...................................57%
• RSM Production Corporation ...................................38%
• Societe Nationale des Hydrocarbures (SNH) (Government of Cameroon).......5%

This is fact and any dispute by RDL/VOG is baseless.

RSM questions that when the legal department of Société Générale studies the unresolved problems of RDL/VOG, that Société Générale will go through with its potential financing of RDL/VOG of $30 million US dollars.