TIDMVOG
RNS Number : 0911Y
Victoria Oil & Gas PLC
17 August 2018
17 August 2018
Victoria Oil & Gas Plc
("VOG" or "the Company")
Q2 2018 Operations Update
Victoria Oil & Gas Plc, the Cameroon based gas and
condensate producer and distributor, provides an update on the
Group's operations for the three months ended 30 June 2018 ("Q2 18"
or "the Quarter").
Highlights:
-- Gaz du Cameroun S.A. ("GDC") remains confident of a
resolution with ENEO Cameroon SA ("ENEO") with regards to the grid
power supply issue
-- CNG agreement to partner with Naturelgaz Sanayi ve Ticaret
A.S ("Naturelgaz") announced on 26 June 2018 provides GDC with the
opportunity to reach larger customers beyond the current pipeline
infrastructure
-- GDC added two new customers during Q2 2018
-- Positive reserves update following the completion of the drilling campaign
GDC remains engaged with ENEO following the non-renewal of the
grid power gas sale agreement at the end of December 2017, as
announced on 5 January 2018. As a result of sales to ENEO not
recommencing during Q2 18, the gas consumption levels from GDC's
57% participating interest in the Logbaba Project in Douala,
Cameroon, are at similar levels to those reported in Q1 18.
Logbaba - Quarterly production update
The Q2 18 gross and net gas and condensate sales for Logbaba and
GDC, are as follows; amounts in bold are gas and condensate sales
attributable to GDC (57%):
Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017
Gas sales (mmscf)
-------------- -------------- -------------- ---------------------- --------
Thermal 174 305 179 313 177 312 157 276 191 322
------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Retail power 9 15 10 17 10 18 12 20 9 15
------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Grid power 0 0 0 0 226 396 180 317 508 855
------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Total (mmscf) 183 320 189 330 413 726 349 613 708 1,192
------ ------ ------ ------ ------ ------ ------ ------ ------ --------
Average gas production
(mmscf/d) 3.30 3.50 7.94 6.96 14.59
-------------- -------------- -------------- ---------------------- --------
Condensate sold
(bbl.) 1,657 2,907 1,654 2,900 3,951 6,931 2,538 4,452 5,437 9,147
------ ------ ------ ------ ------ ------ ------ ------ ------ --------
ENEO update
The Government of Cameroon, ENEO, Altaaqa Global ("Altaaqa"),
the genset providers to ENEO which consume GDC's gas, and GDC
continue to seek a resolution to the suspension of sales to the
ENEO owned Logbaba and Bassa power stations in Douala.
GDC remains confident that a solution will be found, and all
parties are actively engaged in the process. The shortfalls in
power supply in Cameroon continue, with hydroelectric schemes not
meeting the current demand.
Customer developments
During the quarter, GDC commissioned one new thermal customer
and one new retail power customer. In addition, an existing thermal
customer, Camlait, commissioned a retail power solution. Production
levels have increased from 3.3mmscf/d during Q2 2018 to 4.4mmscf/d
during August 2018.
Because of the current power shortages in Douala, several
existing and new customers have expressed interest in the retail
power solutions which GDC is offering and we expect to have several
of these customers signed up by year end ready for consumption of
gas for power generation.
GDC is expediting its support to manufacturers and producers in
Douala who are facing regular power disruptions by providing
bespoke gas fired power generation for individual customers or
groups of customers. As most of these proposed power customers are
already connected to the gas pipeline network, adding a gas to
power generation solution would increase gas consumption with
minimal capital costs for GDC.
On 26 June 2018 the Company announced an agreement to partner
with Naturelgaz on CNG projects. Naturelgaz is Europe's largest CNG
supplier and distributor and brings valuable expertise within this
field to support GDC. The project will afford GDC the opportunity
to reach larger customers beyond the pipeline infrastructure and
aims to replace diesel and heavy fuel oils in a variety of
applications. As part of a customer diversification strategy,
active discussions are underway with a number of such potential
customers.
Reserves update
On 4 June 2018, the Company announced that a full subsurface
reinterpretation of the Logbaba Field had been completed following
conclusion of the 2017 drilling campaign. This incorporated the
reprocessed historic seismic data and the new well data as a basis
for ongoing reservoir development, which led to a material upgrade
in the reserves of the Logbaba Field as follows:
Basis Field Position at 1/1/17 Field Position at 1/1/18
Initial Cum Prod'n Remaining Initial Cum Prod'n Remaining VOG Net
Reserves reserves Reserves Reserves Reserves
---------- ----------- ---------- ---------- ----------- ---------- ----------
Proved (1P) 49 9 40 82 13 69 40
---------- ----------- ---------- ---------- ----------- ---------- ----------
Proved+ Probable
(2P) 212 9 203 322 13 309 176
---------- ----------- ---------- ---------- ----------- ---------- ----------
Proved+ Probable+
Possible
(3P) 350 9 341 548 13 535 305
---------- ----------- ---------- ---------- ----------- ---------- ----------
All volumes are bcf and do not include condensate volumes
Position at 1/1/17 based on Blackwatch report from August 2016
Position at 1/1/18 based on integrated reservoir study post La-107
and La-108 development drilling
The new proven + probable (2P) reserves level will support a
production rate of 90mmscfd for 10 years; thereby enabling
significant expansion of the business in support of the growing
domestic gas market in Cameroon.
This evaluation supersedes the Blackwatch Report of August 2016
and is based on a new full field subsurface model incorporating
interpretations from the reprocessed seismic together with the well
data from La-107 and La-108. The work has been managed by VOG
supported by external consultants who have provided subsurface
expertise and modelling capability to produce the updated
development plan for the field. This work will now enable selection
of locations for future development wells, commencing with La-109,
to continue development of the Logbaba Field in line with demand
growth in Douala, Cameroon.
Competent Person Review
Sam Metcalfe, the Company's Subsurface Manager has reviewed and
approved the technical information contained in this announcement
in his capacity as a qualified person under the AIM Rules.
This announcement contains inside information.
For further information, please visit www.victoriaoilandgas.com
or contact:
Victoria Oil & Gas Plc
Kevin Foo / Ahmet Dik Tel: +44 (0) 20 7921 8820
Strand Hanson Limited (Nominated and Financial Adviser)
Rory Murphy / Stuart Faulkner / Ritchie Balmer Tel: +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited (Joint Broker)
Mark Percy / Toby Gibbs (corporate finance) Tel: +44 (0) 207 408 4090
Jerry Keen (corporate broking)
FirstEnergy Capital LLP (Joint Broker)
Jonathan Wright / David van Erp Tel: +44 (0) 207 448 0200
Camarco (Financial PR)
Billy Clegg Tel: +44 (0) 203 757 4983
Nick Hennis Tel: +44 (0) 203 781 8330
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END
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