Term Sheet signed with Aksa Energy
29 July 2019
Victoria Oil & Gas Plc
("VOG" or the "Company" or the "Group")
Term Sheet signed with Aksa Enerji Uretim A.S.
to supply up to 25mmscfd of gas to 150MW Douala Power Station
Victoria Oil & Gas Plc, whose wholly-owned subsidiary, Gaz du Cameroun S.A. ("GDC"), is the fully integrated onshore gas producer and distributor with operations located in the port city of Douala, Cameroon, is pleased to announce that it has signed a non-binding term sheet with Aksa Enerji Uretim A.S. ("Aksa Energy") ("Term Sheet") to supply Aksa Energy with up to 25mmsfd of gas to Aksa Energy's planned 150MW power station, to be located in Bekoko, Douala, Cameroon.
The Term Sheet is subject to various conditions precedent, including government approvals and the signing of a Power Purchase Agreement by Aksa Energy with Eneo Cameroon S.A. ("ENEO") or "Sonatrel" (the Cameroon Government owned manager of the national electricity network). The key commercial terms between Aksa Energy and GdC include:
· Gas Price: US$6.75 per mmbtu;
· Term: 25 years, plus option to extend for an additional 5 years; and
· 70% Take or pay component.
Aksa Energy is one of the largest independent power producers in Turkey, selling 14 TWh/year of energy globally.
On 2 July 2019, the Minister of Water Resources and Energy of Cameroon ("Minister"), on behalf of the Government of the Republic of Cameroon, and Aksa Energy, entered into a Memorandum of Understanding to develop a 150MW of power plant project in Douala, subject to receipt of the requisite approvals and licenses
The location of the proposed power plant is expected to be near the Bekoko substation, near to GDC's existing gas pipeline network.
GDC's management has been working closely with Aksa Energy and ENEO to develop this exciting gas-to-power project, and GDC, Aksa Energy and ENEO gratefully acknowledge the support and guidance they have received from the Minister.
The Term Sheet, which the Company expects to lead to a long term grid power contract requiring natural gas from GDC gives support to the long term field development plans of GDC in Cameroon for both the Logbaba Field and Matanda Block in order to deliver the contracted gas for this project.
Ahmet Dik, Chief Executive Officer of VOG commented:
"Considerable progress has been made in our Gas-to-Power strategy, as evidenced by the term sheet signed with Aksa Energy, one of the largest global independent power producers. Upon commencement, which is planned for late 2020, production levels would dwarf the current level of gas sales and propel VOG into a profitable trajectory of growth which has always been our aim. Much work and effort by all stakeholders has gone into progressing this project and I am confident the additional power expected to be generated will be highly beneficial for the Cameroonian people and the economy as Douala continues to attract industry into the busy port town.
We are delighted to have begun a partnership with such a high-profile, professional and reputable company such as Aksa Energy which has a depth of experience in installing and operating successful gas facilities across Africa. Additionally, I would like to thank the Government of Cameroon for their support of this project, and we look forward to working closely with them through to the delivery of first gas and power."
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Ahmet Dik Tel: +44 (0) 20 7921 8820
Strand Hanson Limited (Nominated and Financial Adviser)
Rory Murphy / James Dance / Jack Botros 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 / Hugh Sanderson 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
Notes to editors
About Aksa Enerji Uretim A.S.
Aksa Energy is one of the largest independent power production company in Turkey with headquarters in Istanbul. Aksa Energy sells 14 TWhr of energy annually. Aksa Energy also has experience in installing and operating power generation facilities in Africa, specifically Ghana (370MW), Mali (40MW) and Madagascar (66MW).
About Vitoria Oil & Gas
Victoria Oil & Gas is a fully-integrated onshore gas producer and distributor with operations located in the port city of Douala, Cameroon. Through the Company's wholly-owned subsidiary, Gaz du Cameroun S.A. ("GDC"), VOG delivers gas via a 50km gas distribution pipeline network to a range of major industrial customers.
Since spudding its first wells in 2010, the Company has grown to become the dominant player in the Cameroon onshore gas market, primarily through the 57% owned and operated Logbaba Gas Project. GDC is partnered on this project with RSM Production Company ("RSM"), and Société Nationale des Hydrocarbures ("SNH"), which have holdings of 38% and 5% respectively.
VOG also owns 75% of the Matanda license area, which is 1,235 square kilometres and adjacent to Logbaba gas project in the highly prospective Douala Basin, with Afex Global Limited ("AFEX") owning 25%.
Victoria Oil & Gas is listed on the AIM market of the London Stock Exchange under the ticker VOG.
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