Victoria oil & gas shares rise on draft report to settle cost dispute

Shares in Victoria Oil & Gas PLC(VOG.LN) rose more than 11% on Monday after the U.K.-listed gas explorer said it has received a draft report that aims to clarify a dispute over what development costs have been covered by each shareholder in its Cameroonian Logbaba gas project.

Victoria claimed in January that RSM Production Corp, its partner in the project, must pay $26 million in development costs still outstanding. RSM initially disputed the amount but then paid $16.3 million on condition that the two would appoint an independent auditor to determine the need to pay the remaining balance. The two companies then appointed Deloitte Touche Tohmatsu Ltd. in September to carry out the independent audit.

Victoria owns a 60% stake in the Logbaba project while RSM owns the remaining 40% of the project. The Cameroonian government's state-owned Société Nationale des Hydrocarbures has the right to earn a 5% interest in the project.

Victoria said that both partiers will now be able to submit comments on the draft report to Deloitte, which will then produce a final, binding report. No timetable was provided for delivering the final report.

Victoria's shares were up 11.7% at 1.5 pence a share as of 0725 GMT, resulting in a market capitalization of GBP58 million or $93 million.