Victoria Oil & Gas PLC (LON:VOG) saw its shares soar on Christmas Eve after it announced that its wholly-owned subsidiary Gaz du Cameroun SA (GDC) is to resume gas supply to the Logbaba 30 megawatt (MW) power station after signed a binding term sheet with grid power provider, Eneo Cameroon SA (ENEO).
The AIM-listed, Cameroon based gas and condensate producer and distributor, said gas supply and power distribution under the 3-year contract term commenced on 22 December 2018.
It pointed out that the contract will increase current daily average consumption by more than 100% to approximately 8.8mmscf/d, with a gas price range from US$6.75 to US$6.95 per MMBtu over the contract term.
The company commented: "The new contract provides GDC with a stable three-year deal that immediately doubles daily average gas sales, whilst also offering a platform for further opportunities with ENEO, notably at their 20 MW Bassa Power Station in Douala.”
It added: “With the resumption of the ENEO contract, the Company is in a strong position for growth during 2019. GDC 's significant reserve base and position as the only onshore gas producer in Cameroon provides a unique opportunity to produce more power in the region for the benefit of both the Company and the people of Cameroon.”
In early morning trading, Victoria Oil & Gas was by far and away the top London market gainer, leaping 44% higher to 22.85p.
In a note to clients, ‘house’ broker ShoreCapital said: “We believe that renewal of the ENEO contract is genuinely excellent news for VOG”.
-- Adds share price, analyst comment --