CHAIRMAN'S LETTER

Dear Shareholder,

On behalf of the Board, I set out below our unaudited interim results for the six months to 30 June 2021 ("H1 21" or "reporting period"), an operational update for Q3 21 and commentary on the Company's progress. 

Victoria Oil & Gas Plc ("VOG", the "Company" or the "Group") currently generates revenue by reliably and safely supplying gas through its 57% participating interest in the Logbaba Project in Douala, Cameroon, which is held by its 100% owned subsidiary Gaz du Cameroun S.A. ("GDC").

Logbaba Operations Update

The sales figures from the Logbaba Project in Cameroon are as follows:

The table refers to gross Logbaba Project gas sales, unless specified as attributable to GDC representing its 57% interest in the project.

Gas was produced and delivered to customers in Douala on an uninterrupted basis during the reporting period without any significant safety incidents, underlining our commitment to operate in a safe and environmentally friendly manner.  Our customers continue to realise the benefits of natural gas, by far the cleanest burning fossil fuel, having converted from significantly higher priced diesel or heavy fuel oil and subsequently reducing their harmful emissions in the Douala area. 

Post period, Q3 2021 production update:

Quarterly gross and net gas and condensate sales at Logbaba are as follows (amounts in bold are net gas and condensate sales attributable to GDC (57%)):

Industrial Customers

Our focus continues to be to improve our customer diversification post the termination of the ENEO Gas Sales Agreement ("GSA"). The focus on industrial customer growth around the existing pipeline continues to positively impact our results with an 8% increase in thermal and industrial gas consumption compared to H1 20, reaching 952 MMscf gross gas sales during the reporting period (H1 20; 881 MMscf). Attributable revenue for thermal and industrial customers in the reporting period was US$6.8 million compared to US$6.7 million in H1 20.

Well La-108 Remediation update

Well La-108 was brought online on 15 February 2020. The well was initially producing on its own and then in combination with another well so that La-108 could be kept at a constant rate and to ensure that operations could be managed given contrasting wellhead pressures.  The well started producing significantly more water than previous wells, and above what might be expected as just water of condensation. The level of water production (up to 200 bbl/d) was managed relatively easily by the operations team.

Together with the volumes produced during testing last year, the well has produced a cumulative 0.467 Bcf to date (over 111 days), and it had been supplying the majority of the gas produced by GDC whilst it was on production. La-108 was shut in on 6 June, the other wells meeting the needs of our customers since then, enabling GDC to carry out a longer-term pressure build up (PBU), which will allow us to learn more about the reservoir system that it has been producing from.

We have unanimous partner approval to add perforations to the upper sands in La-108, which we expect to more than double net pay. Such is the pressure difference between the top and bottom of the reservoir that perforating must be done in two stages, as was done on other wells. Adding perforations should increase the well's productivity, reduce the overall water cut and enable access to all of the well's connected gas volumes.

Matanda Subsurface

In late 2020, the Minister of Mines, Industry and Technological Development granted a one-year extension to our licence to 17 December 2021.

A team arrived in country to start the Environmental and Social Impact Assessment ("ESIA") in March 2020 but were unfortunately repatriated out of Cameroon due to Covid-19 and in total some six months were lost before they could return and complete the work. The ESIA was submitted in March 2021 and GDC was pleased to announce that the ESIA Report on its planned activities on the Matanda Block was approved in early June 2021. The certificate of environmental conformity, as issued by an inter-ministerial committee between the Ministry of Environment, Protection of Nature and Sustainable Development ("MINEPDED") and the Ministry of Mines, Industry and Technological Development ("MINIMIDT") permits the progress of drilling activities subject to the implementation of an approved Environment and Social Management Plan ("ESMP").

Well planning and the procurement of long lead items have progressed and civil engineering works are due to commence in the 4th quarter. The search for an appropriate drilling rig is well underway, and a short list of candidate rigs has been drawn up. Note that the total drilled depth of a Matanda well to test Tertiary-aged prospects will be significantly shallower than Logbaba wells which produce from older and deeper, Cretaceous-aged reservoirs. The total depth of the first well is likely to approximately 1,250m (Logbaba wells can reach over 3,000m).

In order to share the capital and risk of drilling the commitment well, the Company is seeking an industry partner via a farmout process which continues post-period.

ENEO

On 16 April 2021, GDC signed a settlement agreement with ENEO for the payment of the gross amount to GDC of approximately 2.74 billion FCFA (Central African CFA franc) (circa US$5 million).  This settlement relates to the Take-or-Pay invoices for October, November and December 2019 plus associated interest. During this period for which Take-or-Pay invoices were issued, gas was not being supplied to ENEO because there was no demand (the generating equipment at ENEO's site had been turned off). 

All of the amounts invoiced to Eneo were fully provided for in the Annual Accounts for the year ended 31 December 2019 and the Interim Statement for the period to 30 June 2020. 

GDC received a gross payment of US$5.1 million from ENEO in full and final settlement in early June 2021.

RSM Arbitration

As announced on 29 September 2021, VOG and RSM entered into a settlement agreement which has enabled the parties to dismiss the UNCITRAL hearing which was due to commence at the end of September 2021. The settlement involves the agreement of certain accounting policies and procedures, the clarification of certain decision-making processes, and an agreement on the amount of monies payable to RSM in line with their existing contractual arrangements from existing cash resources in country. This hearing and the inevitable follow-up would have likely cost the Company a substantial amount in legal costs alone, whilst the amounts under dispute were material as noted in the Annual Accounts for the year ended 31 December 2020.

The settlement of the UNCITRAL arbitration is without prejudice to all claims pending in the ICC arbitration Case No. 23991/MK. The ICC arbitration hearing took place in April of this year, and the ICC has yet to issue its Award.

Well La-108 Insurance claim

The Company continues to pursue its meritorious insurance claim with respect to the well control incident in well La-108 in March, 2017.

West Medvezhye

Our West Medvezhye asset in Russia continues to attract attention, helped by elevated oil prices (compared to 2020). We have a number of interested parties conducting due diligence on the asset.

Environmental Social and Governance (ESG)

The spread of the Covid-19 virus in Cameroon has been relatively contained in comparison to other countries.  A crisis management team was established at GDC in Cameroon in accordance with the corporate management plan to manage the company's activities and coordinate with the State authorities.  Whilst the Company has experienced a number of logistical issues in relation to quarantining and travel constraints, which have caused delays to a number of workstreams, the safety of employees and consultants was and continues to be paramount to the business.  A small number of our customers experienced supply and operational constraints because of the pandemic, but our gas supply remains uninterrupted.  Our local community platform meetings had to be suspended for a period, but these have now resumed with the necessary measures in place to ensure safety of attendees.

The Company continued evolving CSR systems into an ESG initiative during the period to ensure that the Company's Environmental, Social and Governance policies and practices are integrated into all aspects of the organisation, ensuring Board oversight and improved communications to its stakeholders. 

A key focus during the period was the completion and approval of the ESIA process on the Matanda Project.  The liaison with the relevant stakeholders in this regard is ongoing.  Community support has continued during the period with a number of Logbaba and Ndogpassi based projects being supported.  Materially, post period, GDC has strengthened its relationship with the Logbaba District Hospital by supporting financially the creation of a new emergency unit.

Final Word                 

We are pleased with the resilience that our Cameroon business has shown through recent times and the positive results from our remediation of well La-108. It was an important step in bringing La-108 onto production and we look forward to the results of the pressure build-up exercise and subsequent perforating programme. The work programme on Matanda has shown significant prospectivity and there has been significant operational progress in 2021 including the approval of the ESIA Report, the well planning and tendering for long lead items. On a final note we are very pleased to announce that in June, GDC passed one million man-hours without a single Lost Time incident.

Roger Kennedy

Chairman

31 October 2021

Financial Review

The interim report for the six-month period ended 30 June 2021 is compared to the six month period ended 30 June 2020 ("prior period" or "H1 20") as required by International Financial Reporting Standards ("IFRS").

Revenue and Results

Performance

The Group's revenue for the reporting period was US$7.1 million, US$5.5 million lower than the prior period (H1 20 US$12.6 million).

The revenue for the six month period to 30 June 2020 included approximately US$5.9 million related to ENEO.As a result of the ENEO settlement, this revenue was reversed in the Annual Accounts to 31 December 2020. Stripping out this ENEO revenue, then the attributable revenue for thermal and industrial customers in that period was US$6.7 million compared to US$6.8 million in the reporting period. Condensate sales were US$0.3 million in the reporting period compared to US$0.1 million in the comparable period.

Revenue is currently derived entirely from the Logbaba Project in Cameroon. Gas is sold to customers for thermal energy production and electricity generation, with revenue also generated from the sale of condensate, a by-product from gas production and processing.

Administrative expenses in the reporting period were US$1.6m higher than the prior period, primarily due to the significant legal expenses in relation to the RSM arbitrations.

Adjusted EBITDA, a non-IFRS measure which excludes depreciation and impairment charges from operating profit prior to financing charges and tax, reflects a loss of US$0.4 million (H1 20: US$0.8 million).

The loss after taxation of the Group for the six months to 30 June 2021, which incorporates the items mentioned above, amounted to US$2.3 million (H1 20: US$3.7 million). Loss per share for the six months to 30 June 2021 was 0.89 cents (H1 20: 1.45 cents).

Financial Position

Trade and other receivables

Trade receivables have decreased by US$3.3 million in the six month period to 30 June 2021 primarily due to the effects of the ENEO settlement.

Cash and cash equivalents

Cash as at 30 June 2021 was US$1.6 million (31 December 2020: US$1.8 million).

Trade and other payables

Trade and other payables have increased by US$22.8 million in the reporting period compared to the comparable prior year period and decreased by US$1.2 million since the Annual Accounts to 31 December 2020.

The principal reasons for the increase since the six months to 30 June 2020 is due to:

•      increase in trade payables due to increased legal fees with respect to the two arbitrations with RSM;

•      reclassification of the State Royalty to a current liability in 2020 from a provision in 2019; and

•      the CHL settlement consideration.

Accruals includes an amount of US$0.6 million (31 December 2020: US$0.8 million) in relation to the land claim on the Logbaba Project.

Other payables includes an amount of US$1.4 million (31 December 2020: US$1.7 million) due under the reserve bonus settlement, US$12.3 million (31 December 2020: US$13.2 million) royalty obligation due under the Logbaba Concession agreement and an amount under the CHL settlement agreement with US$1.2 million (31 December 2020: US$1.2 million) disclosed as a current liability, and a further US$6.7 million (31 December 2020: US$6.9 million), disclosed as a non-current liability.

Borrowings

Total borrowings of US$13.7 million compares to US$14.6 million at 31 December 2020.

Net Debt

The Group was in a net debt position of US$12.1 million at 30 June 2021 (31 December 2020: US$12.8 million).

Cash Flow

Operating activities

The Group utilised cash in operating activities of US$0.9 million during the reporting period (H1 20: generated cash of US$6.1 million). Working capital increased by US$2.0 million (H1 20: US$5.7 million). Net cash generated from operating activities was US$0.6 million (H1 20: $0.3 million utilised).

Contingent liabilities

RSM

RSM instituted an arbitration in Texas, USA under ICC rules in 2018 and separately on 3 February 2020, RSM filed an arbitration application under UNCITRAL Rules pursuant to a Participation Agreement for the project.

As announced on 29 September 2021, the UNCITRAL arbitration has been settled.

The settlement of the UNCITRAL arbitration is without prejudice to all claims pending in the ICC arbitration Case No. 23991/MK. The ICC arbitration hearing took place in April of this year, and the ICC has yet to issue its Award.

Arbitrations under ICC and UNCITRAL rules are confidential processes. VOG is not permitted to provide detailed comments on them.

The amounts under dispute in the ICC arbitration are significant, and an adverse finding would have a material impact upon the Group's cash forecast and its ability to continue as a going concern.

Loan Note and Warrants with Hadron Master Fund

On 8 April 2021, VOG announced that it had raised GBP1.25 million through the issue of an unsecured loan note provided by its second largest shareholder, Hadron Master Fund ("Hadron"). The loan note is repayable on 5 April 2022 for 110% of the principal amount. Pursuant to the loan note, Hadron was granted warrants over 10,416,667 ordinary shares of £0.005 in the Company's share capital ("Ordinary Shares"). The subscription price of the warrants is 6.0 pence per Ordinary Share and can be exercised at any time prior to the third anniversary of the issue.

Loan Note Instrument with Meridian Capital (HK) Limited

On 18 June 2021, VOG announced that it had entered a definitive financing agreement with Meridian Capital (KH) Limited ("Meridian") (the "Facility") to raise maximum proceeds of US$7.5 million. The Facility is comprised of two series of loan notes - A Loan Notes and B Loan Notes (together, the "Loan Notes"). Key terms of the Facility are set out in the relevant Company announcements available on our website.

The Company has fully drawn the Facility post the reporting period as announced on 1 October 2021.

Directors' Responsibility Statement

The Directors confirm that to the best of their knowledge the unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'.

Robert Collins

Chief Financial Officer

31 October 2021

Condensed Consolidated Income Statement

For the six-months ended 30 June 2021

Condensed Consolidated Statement of Comprehensive Income

For the six-months ended 30 June 2021

Condensed Consolidated Statement of Financial Position

As at 30 June 2021

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Cash Flow Statement

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

1.  GENERAL INFORMATION AND BASIS OF PREPARATION

The unaudited interim condensed consolidated financial statements ("Interim Financial Statements") of Victoria Oil & Gas Plc and its subsidiaries ("the Group") for the six months ended 30 June 2021 have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' ("IAS 34") and the AIM Rules for Companies.

The Interim Financial Statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2020.  The Interim Financial Statements are presented in US Dollars, rounded to the nearest thousand (US$000) except as otherwise indicated.

The condensed set of financial statements for the six months ended 30 June 2021 is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. They have been prepared using accounting bases and policies consistent with those used in the preparation of the audited financial statements of the Company and the Group for the year ended 31 December 2020 and those to be used for the year ending 31 December 2021. The comparative figures for the half-year ended 30 June 2020 are unaudited. The comparative figures for the year ended 31 December 2020 are not the Company's full statutory accounts but have been extracted from the financial statements for the year ended 31 December 2020 which have been delivered to the Registrar of Companies and the auditors' report thereon was unqualified and did not contain a statement under sections 498(2) and 498(3) of the Companies Act 2006.

The Interim Financial Statements have been prepared on a going concern basis, under the historical cost convention, except for the revaluation of certain financial instruments.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the new and amended standards and interpretations discussed below.

In the year to 31 December 2021 the annual financial statements will be prepared in accordance with IFRS as adopted by the UK Endorsement Board and that this change in basis of preparation is required by UK company law for the purposes of financial reporting as a result of the UK's exit from the EU on 31 January 2020 and the cessation of the transition period on 31 December 2020.

This change does not constitute a change in accounting policy but rather a change in framework which is required to ground the use of IFRS in company law. There is no impact on recognition, measurement or disclosure between the two frameworks in the period reported.

These Interim Financial Statements were approved by the Board of Directors on 31 October 2021.

2.  ACCOUNTING POLICIES

New amended standards adopted by the Group

The following amended standards and interpretation are effective for financial years commencing on or after 1 January 2021.

·      IFRS 9, IAS 39, and IFRS 7 (Amendments) - Interest Rate Benchmark Reform (effective date 1 January 2021).

·      IAS 1 (Amendments) Presentation of Financial Statements on Classification of Liabilities (effective date 1 January 2021).

·      IFRS 17 - Insurance Contracts (effective 1 January 2022).

Given these amendments were endorsed by the EU before 31 December 2020 they are part of the EU-IFRS as it stands at 31 December 2020 and therefore are UK endorsed.

These standards do not have a material impact on the Group in the current or future reporting periods. There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods.

Estimates and Judgements

The preparation of the condensed interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 December 2020.

3.  GOING CONCERN

The Directors are required to give careful consideration to the appropriateness of the going concern basis in the preparation of the Interim Financial Statements.

In their consideration of the appropriateness of applying the going concern assumption, the Directors have reviewed cash flow forecasts for the period to 31 December 2022, the factors, estimates and assumptions included in the forecasts and the related sensitivities. Future outcomes may differ materially from these estimates.

The significant factors, estimates and assumptions applied in the cash flow forecast are as follows:

Cameroonian State royalty obligation

The Logbaba Project has operated as an integrated upstream and downstream operation since inception. In order to comply with the Gas and Petroleum Codes in Cameroon, the parties are working with The National Hydrocarbons Corporation of Cameroon ("SNH") to separate the business into its components. The parties are in ongoing negotiations with SNH regarding the mechanism and fiscal arrangements for, amongst others: the potential participation of SNH in the downstream activities; the allocation of assets, liabilities, revenues and costs, and the associated transfer pricing mechanisms; and the net settlement required by SNH to take ownership of their entitlement. One of the matters under negotiation has been GDC's and RSM's obligation to pay State Royalties. In prior years this potential liability was disclosed as a contingent liability. Following the signing of a new Accounting Procedure to the licence in mid-2020, the royalty liability crystalised and the Company accordingly recognised a provision of US$9.6 million in the Annual Report to 31 December 2019. This has been increased to US$13.2 million as at 31 December 2020 and recognised as a current liability. It has been agreed that this amount be reduced by the amounts owed by SNH with respect to their 5% share of net revenues and costs. Although the amount is payable on demand, discussions are ongoing with SNH in relation to both the timing and mechanism of settlement. As outlined above a number of options are being discussed, including potential future participation of SNH in the downstream operations of GDC. The Directors believe that it will take time to complete these discussions and to agree on timing and mechanism of settlement. The Directors are currently in discussions with respect to funding to defray this liability as soon as is possible. In the event that GDC is required to pay the full amount within the next twelve months and has not secured additional financing, this would have a material adverse impact on the Group's cash forecast and ability to continue as a going concern.

Other Items

The group is exposed to further contingent liabilities as outlined in Note 14. The amounts concerned have material impacts on the Group's ability to continue as a going concern.

Conclusion

The Directors have reviewed operating and cash forecasts in respect of the operating activities and planned work programmes of the Group's assets. The expected cash flows, plus available cash on hand, after allowing for funds required for administration and development costs, working capital improvement and debt servicing, are expected to cover these activities.

Based on the cash flow forecasts prepared the Directors are of the view that the Group and the Parent Company is sufficiently funded for the twelve-month period from the date of approval of these Interim Financial Statements. However, the Directors note that there are material uncertainties as listed above, which if any should eventuate, would require them to raise additional funds in 2021 and/or 2022.

Although the Directors consider the likelihood of these uncertainties eventuating to be remote, they are confident additional funding can be accessed should it be required.

On the basis of the considerations set out above, the Directors have concluded that it is appropriate to prepare the Interim  Financial Statements on a going concern basis. These Interim Financial Statements do not include any adjustments to the carrying amount and classification of assets and liabilities that may arise if the Group or the Parent Company was unable to continue as a going concern.

4.  SEGMENTAL ANALYSIS

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about the Group that are regularly reviewed by the chief operating decision maker. The Board is deemed the chief operating decision maker within the Group. The Group has one class of business: oil and gas exploration, development and production and the sale of hydrocarbons and related activities. This is analysed on a location basis. Only the Cameroon segment is generating revenue, which is from the sale of hydrocarbons. For the purposes of segmental reporting, the Russia and Kazakhstan segments have been combined, as the assets of these segments have both been fully impaired. The accounting policies of the reportable segments are the same as the Group's accounting policies.

The following tables present revenue, loss and certain asset and liability information regarding the Group's business segments:

5.  LOSS PER SHARE

Basic loss per share is computed by dividing the loss after tax for the period available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the period.

The following table sets forth the computation for basic and diluted loss per share.

Basic and diluted loss per share are the same in the current period, as the effect of any potential shares is anti-dilutive, and it therefore excluded.

6.  INTANGIBLE ASSETS

The addition in the exploration and evaluation assets relate to the Logbaba drilling programme on well La-108.

Recoverability of exploration and evaluation assets is dependent on the successful development of reserves within the license period, which is subject to a number of uncertainties including the ability of the Group to access financial resources to develop the projects and bring the assets to economic maturity and profitability. An annual impairment test is completed by management to determine if there are any indicators of impairment.

7.  PROPERTY, PLANT AND EQUIPMENT

Assets under construction consists of expenditure relating to the pipeline network and surface infrastructure on the Logbaba Project in Cameroon.

The realisation of property, plant and equipment is dependent on the continued successful development of economic reserves within the license period, which is subject to a number of uncertainties including the Group's ability to access financial resources to continue to successfully generate revenue from the assets. An annual impairment test is completed by management to determine if there are any indicators of impairment.

8.  TRADE AND OTHER RECEIVABLES

Trade Receivables

Trade and other receivables are financial assets and measured at amortised cost. The Group applies the IFRS 9 simplified approach to measuring expected credit losses ("ECL") which uses a lifetime expected loss allowance for all trade receivables.

Other Receivables

Other receivables includes a receivable from joint venture partners (RSM, SNH and AFEX) of US$8.2 million (30 June 2020: US$5.1 million; 31 December 2020: US$8.4 million) for their share of their participating interest in the Logbaba and Matanda Blocks.

Movement in Expected Credit Loss

9.  TRADE AND OTHER PAYABLES

Accruals

Accruals includes an amount of US$0.6 million (30 June 2020: US$1.0 million; 31 December 2020: US$0.8 million) in relation to the land claim on the Logbaba Project. US$0.9 million was included at 31 December 2020 in relation to well La-108 remediation works.

Other payables

Other payables includes an amount of US$1.4 million (30 June 2020: US$1.7 million; 31 December 2020: US$1.7 million) due under the reserve bonus settlement, US$12.3 million (30 June 2020: Nil; 31 December 2020: US$13.2 million) royalty obligation due under the Logbaba Concession agreement and an amount under the CHL settlement agreement with US$1.2 million (30 June 2020: Nil; 31 December 2020: US$1.2 million) disclosed as a current liability, and a further US $6.7 million (30 June 2020: Nil; 31 December 2020: US$6.9 million), disclosed as a non-current liability.

The carrying value of trade and other payables approximates to fair value.

10.     PROVISIONS

Non-current provisions represent the present value, as at the Statement of Financial Position date, of the amounts payable in future periods discounted at a rate that reflects both the time value of the money and the risks inherent in the liability.

11.     BORROWINGS

The outstanding balance on the BGFI Bank loan facility at 30 June 2021 was US$10.1 million (30 June 2020: US$14.3 million; 31 December 2020: US$13.1 million). The loan has a remaining term of two years at 30 June 2021, and bears interest at 7.15% p.a. The loan is secured by a pledge over the revenue stream of certain customers, a pledge over attributable gas production volumes equivalent to the monthly installments and the ceding of GDC's rights to future insurance claims for the tenor of the loan.

Borrowings includes an amount of US$1.7 million (30 June 2020: Nil; 31 December 2020: Nil) in relation to an unsecured loan note entered into with Hadron Master Fund.

12.     NET DEBT

13.     RELATED PARTY TRANSACTIONS

The Group did not have any transactions with related parties during the six-month period ended 30 June 2021, other than as listed below:

John Daniel is a Director of the Company and a Director of JD Oil & Gas Consultancy Limited, an independent oil and gas consultancy. Professional fees paid to consultants in key management positions include US$47,432.12 related to consultancy work carried out by John Daniel, outside of his Non-Executive Director responsibilities, through JD Oil & Gas Consultancy Limited (30 June 2020: US$66,290; 31 December 2020: US$121,068)

14.     CONTINGENT LIABILITIES

RSM

RSM instituted an arbitration in Texas, USA under ICC rules in 2018 and separately on 3 February 2020, RSM filed an arbitration application under UNCITRAL Rules pursuant to a Participation Agreement for the project.

As announced on 29 September 2021, the UNCITRAL arbitration has been settled.

The settlement of the UNCITRAL arbitration is without prejudice to all claims pending in the ICC arbitration Case No. 23991/MK. The ICC arbitration hearing took place in April of this year, and the ICC has yet to issue its Award.

Arbitrations under ICC and UNCITRAL rules are confidential processes. VOG is not permitted to provide detailed comments on them.

The amounts under dispute in the ICC arbitration are significant, and an adverse finding would have a material impact upon the Group's cash forecast and its ability to continue as a going concern.

15.     POST BALANCE SHEET EVENTS

·      A General Meeting was held on the 12 August 2021 for the shareholders to approve the Annual Report and Accounts for the year ending 31 December 2020. The Resolution to approve the accounts was duly passed.

·      A General Meeting was held on 10 September 2021 for the shareholders to approve the Whitewash with respect to the Meridian unsecured loan note instrument. As of the date of this report, US$7.5 million has been drawn down.

·      On 29 September 2021 VOG and RSM entered into a settlement agreement with respect to the UNCITRAL arbitration.

16.     SEASONALITY

With the exception of August, the revenues and operating profits for all other customers are evenly spread across the year. COVID-19 has had limited impact on this trend.

Copies of the Interim Financial Statements are available by download from the Company's website at: www.victoriaoilandgas.com.