Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

VOG on hunt for long-term contracts after reserves upgrade

“I believe that the ENEO issue will be solved as VOG management has prioritised this matter and is focused on achieving a result in the shortest possible timeframe,” chief executive Ahmet Dik
oil and gas operations
Logbaba has reserves for ten years - now its needs customers

Victoria Oil & Gas PLC (LON:VOG) expects to sell larger volumes of gas on longer-term contracts following an upgrade to reserves at Logbaba in Cameroon.

Proved and probable or 2P reserves rose 52% to 309bcf, with the production profile at Logbaba based on that number extended to ten years at 90mln cubic feet per day.

WATCH: Victoria Oil & Gas confident of positive outcome to ENEO issue

Proved reserves (1P), defined by connected volumes to all the wells drilled into Logbaba, were revised up to 69bcf, an increase of 29bcf.

Kevin Foo, VOG’s chairman said the upgrade confirmed field reserves would meet the growing demand in the Douala market for the foreseeable future.

Douala is Cameroon’s second city

“Importantly, this will now enable us to market larger volumes of natural gas on a longer-term contractual basis to buyers, providing them with the security of supply they require.”

The company is looking for new customers following the non-renewal of a supply deal for a gas-fired power plant in Douala. The agreement with ENEO Cameroon expired at the end of December.

ENEO an issue to be resolved

First quarter gross sales reduced by 54% from the preceding quarter to 330mln cubic feet, though on a year-on-year basis it was down 71%.

Average daily gas production amounted to 3.5mln cubic feet, from 7.94mln in the fourth quarter of 2017 and 14.57mln in the comparative quarter of last year.

VOG noted its revised year-end production target of 11.3mln cubic feet per day, though that assumes ENEO supply will be back online by the start of July.

The company told investors that it has added a new customer (in the thermal market) in the second quarter and it is expecting three power generation customers will soon commission their gas-fired generators.

CEO confident business will develop

Ahmet Dik, VOG chief executive, said: "Despite the suspension of the ENEO supply, I believe that the company will actually grow stronger and create a more diverse product base in 2018 and continue to build the outstanding business we have created in Cameroon.

“We have developed gas reserves to meet industrial and grid power demand for large quantities of gas and power that is required by groups other than ENEO.”

Dik added: “We are actively working on non-grid solutions such as customer gas to power units and CNG supply for customers who are away from our pipeline but want gas.

“In parallel with this we are in discussions with large gas volume consumers and independent power producers who are developing large power stations.”

Victoria Oil has a 57% stake in Logbaba through its GDC subsidiary with RSM and Société Nationale des Hydrocarbures (SNH) owning 38% and 5% respectively.

View full VOG profile View Profile

Victoria Oil & Gas plc Timeline

Related Articles

offshore oil rig
May 08 2018
Life has been tough in the oil sector in recent years, but things started to pick up towards the end of 2017
oil and gas operations
July 24 2018
Prospect S offshore Namibia is Chariot's next shot at a big target, drilling is slated for the fourth quarter this year and it will be closely watched by investors
picture of gas flare
February 13 2018
A new gas generator also came on stream recently and has started to produce the first power from the project

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use