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Victoria Oil & Gas PLC: DEEP DIVE

Victoria Oil & Gas on recovery trail after funding boost

“2018 was a tough year for the company but we ended the year on a high."
Gas plant
OVERVIEW: VOG The Big Picture
Gas sales from Logbaba are recovering again


  • Gas supplier to businesses in and around Douala in Cameroon

  • Sales recovering, contract with ENEO re-negotiated

  • £13.7mln fund raise to develop fully assets at Logbaba and Matunda

  • Company valued at £37mln at 14.5p


What it does

Victoria Oil & Gas plc (LON:VOG) has started to grow revenues again after a hiatus with Cameroon power group ENEO ended in December.

The contract was suspended a year earlier when Victoria seemingly became collateral damage in the much larger issue of power supply in Cameroon.

Through its Gaz Du Cameroun subsidiary, Victoria was producing and supplying almost 15mmscf (million cubic feet) gross per day from the Logbaba field when the ENEO contract was at its height.

Output recovered to 4.45mmscf/d for the final quarter of 2018, with a peak of 7.67mmsf/d just after Christmas.

Industrial Power

To boost gas consumption, Victoria Oil is also working to install generators at the sites of industrial customers in return for a ten-year commitment with minimum agreed volumes.

Most of these power customers are already connected to GDC's gas pipeline, so adding a gas-fired generator would involve minimal downstream costs.  

GDC is working with Altaaqa and other equipment suppliers to fast track six generators for customers that want to have power online this year.

The target is to have over 18 gas to power customers online by end of 2019, consuming over 4.5mmscf/d of gas with no seasonality, in addition to the thermal demand.

Fund raising

In March, VOG raised £13.6mln through separate equity issues both priced at 13p, which comprised £7.72mln gross from a placing while VOG’s largest shareholder YF Finance subscribed for £5.85mln of new shares.

The money will be used both to optimise production from the Logbaba field and to kick-start development of much larger Matanda.

Boardroom change

Roger Kennedy has become executive chairman replacing the long-standing Kevin Foo, who has retired.

Victoria said: “The fundraising will strengthen the company's financial position and provide the necessary support for the new board and senior management to take the company to the next level.

“Given the gas demand in the industrial city of Douala Cameroon, and the company's strategic position of being the only onshore gas supplier and operator othe gas pipeline network, the company can now look to develop its Matanda project and optimise its Logbaba operations with a view to becoming cash flow positive in the near term.”

What the boss says: Ahmet Dik, chief executive

“2018 was a tough year for the company but we ended the year on a high.

“We’ve turned the corner with ENEO back on and the aim now is to become cash generative in the near term and longer term to monetise the massive reserves at Logbaba and Matunda.”



Inflection points

Power deficit in Cameroon remains

Companies are looking to install gas supply into to the grid

Industrial power arm continues to develop

The strategy was delayed for a year by the ENEO issue but evidence the strategy now is on track.

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Victoria Oil & Gas PLC Timeline

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