Africa Oil Week blog, from Cape Town.

WTI (Nov) $86.52 +$2.89, Brent (Dec) $91.80 +$2.94, Diff -$5.28 +5c.

USNG (Nov) $6.84 +37c, UKNG (Nov) 275.88 -14.12p, TTF (Nov) €163.515 -€1.45.

Oil price

As Opec meets in Vienna the blog goes out without knowing the result of the meeting, I would guess at a cut of some 1.8m b/d in order to put the boot back on Opec’s foot. Some say that this is  a sinister way of robbing consumers and being hard on recovering economies. But Opec are canny enough to play the game their way and will of course release quotas if and when it is necessary…

Victoria Oil & Gas

Victoria Oil & Gas Plc, whose wholly owned subsidiary, Gaz du Cameroun S.A. (“GDC”), is the onshore gas producer and distributor with operations located in the port city of Douala, Cameroon, provides shareholders with a brief update on operations and corporate matters. 


Gas production continued in July & August at strong levels of above 5.5 MMscf/d, including the usually slower month of August, which was 10% up on last year.


Well site and access road civil works preparations continue with the primary focus on community engagement along the access road whilst contractors wait for the rainy season to come to an end. We have not yet been able to conclude a contract on acceptable terms with the rig owner of the Chad-based rig mentioned in earlier publications, so the Company is pursuing an alternate from the tendering exercise. The Company is still seeking a partner to share the cost and risk of the commitment well.

La-108 Insurance Claim

The Company continues to pursue the insurance claim for the well control incident that occurred in March, 2017.

RSM Litigation

Following the Partial Final Award in April and the Addendum in July, the Company continues its settlement discussions with RSM, including recent face-to-face discussions in the U.S. Such discussions have been cordial and constructive, and 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. Meanwhile the parties, who are partners in the Logbaba project, continue to work together to maximise the value of the Logbaba field.

Consultant Litigation

The Company is in dispute with a former consultant (the “Counterparty”) regarding whether any remuneration is due for services allegedly provided in Cameroon from 2010 and directed at obtaining various licences and authorisations for the Company. This matter was first disclosed in the Annual Report and Accounts for the year ended 31 December 2016 (“2016 Accounts”).

In the 2016 Accounts, the Company reported that certain commercial royalties were subject to legal proceedings (“2017 legal proceedings”) which were initiated by the Company. The 2017 legal proceedings included a substantial counterclaim advanced against the Company. In 2019, the Company elected to withdraw its 2017 legal proceedings due to the apparent financial weakness of the respondent, as he was unable to pay his share of the deposit requested by the ICC ahead of the arbitral proceedings. Consequently, the counterclaim was not pursued by the Counterparty at that time.

In February 2021 the Counterparty initiated an ICC arbitration claim against the Company (“2021 legal proceedings”) in respect of the same subject matter and therefore in substantially the same terms as the counterclaim in the 2017 legal proceedings. In defending the 2021 legal proceedings, the Company noted that once again the Counterparty appeared to be unable to pay his share of the deposit on the dates prescribed by the ICC. The Counterparty was therefore at risk that the 2021 legal proceedings would be struck out. The Company notes that payment of the Counterparty’s outstanding deposit was made, and the virtual arbitration took place last week. The arbitration ruling is currently expected before the end of the year.

Arbitrations under the ICC Rules are subject to data protection and are confidential processes, so VOG is not permitted to provide details or comments on the issues beyond saying that it considers the claim against it in the 2021 legal proceedings to be without merit and that it continues to vigorously defend the claim. The amount under dispute in the arbitration is potentially significant such that an adverse finding could have a material impact upon the position of the Group.


Owing to the financial uncertainty created by the ICC Award against GDC, the Company’s shares were suspended from trading on AIM as announced on 4th April 2022.  The suspension of VOG’s shares remains in place whilst the Company attempts to finalise a settlement with RSM as noted above.  A further announcement will be made later this month to update shareholders.


Until there is resolution with RSM, the Company is 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. The Company remains in regular communication with its creditors, including one of its major shareholders and loan note holders, Hadron Master Fund, whose Loan Note was due for repayment in April 2021 and who remains supportive of the management team’s efforts to resolve the financial situation of the Company and has re-confirmed its support as previously announced in May 2022. 

There is little or nothing that I can add to this report which explains in considerable detail what incredible work that Messrs Kelly and Collins are doing to rescue VOG.

Arrow Exploration

Last week I was invited to have a long chat with Marshall Abbott, the CEO of Arrow Exploration which is primarily focused on growing production in Colombia. The company has been on Aim for less than a year and since then has already tripled the share price which today stands at 17.5p, an impressive performance.

Mr Abbott has very clear aims, production then was 550 boe/d and is now some 1,000 boe/d with a target to reach 3,000 boe/d ‘within 18 months’ which, having spoken with the CEO seems more than likely. 

He talked about the recent tying in of the East Pepper well to the gas system, the well that was announced in September and seriously beat expectations as well as West Pepper which adds great opportunities bearing in mind that Arrow has 100% of undeveloped acreage at Pepper and is another leg and will be ‘sorted out’ next. 

Arrow has much on its plate, I get the impression that RCE-2 is imminent followed by the 4 and 5 wells and also 3 wells at Carrizales Norte which follow the RCS-1 highly successful drill. Mr Abbott also was at pains to talk about water, and sensible reservoir management ‘water is our friend’ he said and said that plans for a dedicated water disposal well to cope with up to 10,000 b/d.

Early worries on the political front appear to have lessened, bans on fraccing and the Royalty issue appear to have been retracted and those who export hydrocarbons have seen tax rates going up but that doesnt include Arrow. At a netback of $70 and new rules the company will be in good nick. 

There is plenty more, a substantial seismic programme should identify a number of leads on Tapir which I would suggest will be drilled next year. All in all the company is rich in prospects and what is more with a high degree of certainty which make me think that those longer term targets look pretty home and hosed. 

That leads to an idea of valuation and target price and readers know that I have been very positive on Arrow from the get go, having had a very good meeting with Marshall Abbott that is more than confirmed. With so much to come I have worked up most of the targets and am putting on a target price of 50p on the company. I will write more on Arrow in due course but it has the Bucket List written all over it. 

The Wentworth Africa Foundation

Last night on the Waterfront in Cape Town I was fortunate to be asked to join an elite gathering of participants at the major fundraiser of the week. 

Wentworth Founder Bob Mc Bean and his wife Barb  were joined by the current CEO, Katherine Roe and many of the WAF team at the fund raiser which captivated the audience as they showed that they are doing a wonderful job looking after young and growing girls and women across Tanzania.

It is apparent that they are doing a fantastic job and the results are there to see, myself and the other participants were proud to be associated with the whole team.