TIDMVOG
RNS Number : 6871D
Victoria Oil & Gas PLC
27 June 2019
27 June 2019
Victoria Oil & Gas Plc
("VOG" or "the Company" or "the Group")
Pre-AGM Trading Update
Victoria Oil & Gas Plc, whose wholly-owned subsidiary, Gaz
du Cameroun S.A. ("GDC"), the fully integrated onshore gas producer
and distributor with operations located in the port city of Douala,
Cameroon, is pleased to provide an update on the Group's operations
prior to today's Annual General Meeting. This update covers the
period from 1 April to 25 June 2019 inclusive ("Q2 19" or "the
Quarter").
Highlights:
-- Q2 19 average gas production rate during the period of 9.72 mmscfd (Q1 19: 10.10 mmscfd)
-- Q2 19 ENEO Cameroun S.A ("ENEO") gas consumption consistently over 5.1 mmscfd
-- Q2 19 gross gas sales of 838 mmscf (Q1 19: 903mmscf)
-- ENEO payment of January 2019 invoice received by GDC
-- GDC and ENEO finalising a fully termed agreement and payment
guarantee to supplement the existing binding term sheet
Ahmet Dik, Chief Executive Officer of VOG commented:
"The Company has continued to perform well over the past
Quarter, delivering consistent production figures following the
resumption of the ENEO contract whilst reducing operating costs. We
have been pleased to receive the January payment from ENEO.
"We continue to diversify our client base as we pursue material
opportunities with other Independent Power Producers in the region
that are recognizing the increasing demand for power in Douala. We
remain confident about the long-term future of this business and
are focused firmly on the development and expansion of our
operations."
Logbaba - Quarterly Production Update
Q2 19 (up to 25 June 2019) gross and net gas and condensate
sales at Logbaba are as follows:
Amounts in bold are gas and condensate sales attributable to GDC
(57%):
*Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018
Gas sales (mmscf)
-------------- -------------- -------------- -------------- --------------
Thermal 195 343 211 370 200 352 194 341 174 305
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Industrial power 13 23 14 25 15 27 9 15 9 15
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Grid power 269 472 290 508 15 25 0 0 0 0
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total (mmscf) 477 838 515 903 230 404 203 356 183 320
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Average gas production
(mmscfd) 9.72 10.10 4.45 3.72 3.30
-------------- -------------- -------------- -------------- --------------
Condensate sold
(bbl.) 3,193 5,602 3,825 6,710 2,701 4,738 2,298 4,032 1,657 2,907
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
* This period is from 1 April to 25 June 2019 inclusive. The
Company will release the full quarter results in due course.
Grid Power Update
GDC has been supplying natural gas to ENEO for the 30MW power
plant, located in Logbaba, over and above contracted minimum levels
since it recommenced gas consumption in December 2018. Daily
average gas consumption by ENEO by month has ranged between 5.1 and
6.2 mmscfd from 1 January 2019 to 25 June 2019 inclusive, with peak
rates during those months ranging between 6.8 and 7.0 mmscfd.
The Company is pleased to announce that payments have been
received from ENEO to settle the January 2019 invoice totaling $0.8
million (net). An amount of $3.5 million (net) remains outstanding,
not including amounts to be invoiced for June.
GDC and ENEO are working to finalise a fully termed agreement
and payment guarantee to supplement the existing binding term sheet
pursuant to which the parties are currently operating.
GDC continues to work closely with ENEO and interested
Independent Power Producers, with a view to further establishing
itself as an integral part of the growth in demand and supply of
electricity to the grid power network in Douala.
Trade Indebtedness
During the Quarter, the Company announced that it had signed a
settlement agreement with Weatherfords Services and Rental Ltd and
a full and final payment of $1.4 million has been made to
extinguish the outstanding debt. In accordance with the settlement,
the parties have signed and filed with the relevant court consent
orders for the statutory demand to be set aside, which has been
approved by the judge, and the court process completed on 5 June
2019.
La-108 remediation & facilities enhancement programme
Planning activities are progressing for the removal of the stuck
perforation gun in La-108. The work will be performed using a
hydraulic work-over unit. A clean out of the wellbore (tubing and
lining) will then be carried out followed by perforation of the
Upper Logbaba Sands. The La-108 well will then be tied-back to the
existing flowline and the flowline made permanent. Planning and
engineering for enhancements to the process plant are also
progressing to tie in with the La-108 well remediation. These
projects are expected to be carried out in H2 19.
ISO Certification
GDC reported in the Q1 19 update that it had completed the
International Organization for Standardization compliance ("ISO")
audit process for ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018.
The Company is pleased to announce that the certifications have now
been received confirming that GDC's Quality, Environmental and
Occupational Safety and Health management systems conform to
international ISO standards.
Cameroon Holdings Limited ("CHL") Royalty Agreement
GDC is in dispute with CHL and its legal advisers have received
documentation from CHL purporting to commence litigation against
GDC and the Company. Our legal advisers are assessing the validity
of the claim and the Company will make further announcements in due
course.
Long term incentive plan - Management options
Further to the Company's circular to shareholders dated 11 March
2019, the Board is currently finalising documentation to implement
a long-term incentive programme for directors and senior
management, with the issue of options over a number of Ordinary
Shares, priced at 14p, with an exercise period of 5 years. It is
expected that such long-term incentive programme will be finalised
during Q3 2019 and a further announcement will be made
accordingly.
For further information, please visit www.victoriaoilandgas.com
or contact:
Victoria Oil & Gas Plc
Ahmet Dik Tel: +44 (0) 20 7921 8820
Kate Baldwin
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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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