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Victoria Oil & Gas - Year End Customer Supply Update 2017


Victoria Oil & Gas Plc, a Cameroon based gas producer and distributor, is pleased to provide an update on the Group's gas supply operations near to the close of 2017 and to announce Q3 production results, which are in-line with expectations.

The last few months have also been extremely active for Gaz Du Cameroun S.A (“GDC”) with five customers commencing consumption of gas:

  • Maya & Co Oil (Palm Oil refinery, new customer)
  • SAE (Food processing, new customer)
  • PROMETAL 3 (Smelter, new plant for existing customer)
  • UCB (Brewery, returning customer)
  • Laminoir (Foundry, returning customer)

Maya Oil and SAE are new customer connections for GDC with both operations taking gas for thermal usage. These customers are both situated on the Magzi industrial estates located on the Western Bonaberi shore, where GDC laid an extensive pipeline network during 2016.

The PROMETAL 3 connection is the latest installation at the industrial smelting complex where GDC already supplies gas to the existing operations (PROMETAL 1 & 2).  UCB and Laminoir are returning customers who have opted to restart consumption of GDC gas following the rise in the heavy fuel oil price.

The impact of the new customer connections and an early uplift in ENEO consumption this year is already being reflected in current production figures with an average of 10.04 mmscf/d gas sales achieved to date in December (1-19th December), peaking at 14.94mmscf/d.

ENEO continued to consume high levels of gas at the Logbaba and Bassa power stations during the Q4 period to date and GDC will continue to provide gas to ENEO under existing contract extensions whilst negotiations on a longer-term contract continue. 

The Company has provided separate updates on completion of wells La-107 and La-108 and further flow tests on the Lower and Upper Sands of La-108 are planned for Q1 2018. Once these tests are completed reserve calculations for both wells will be carried out by internal and external reservoir engineers. However, internal preliminary reserve estimates have given the Company sufficient confidence to enter into long term contract negotiations with current and prospective grid power suppliers.

The full quarterly gross and net gas and condensate consumptions, for Logbaba and GDC, are as follows; amounts in bold are gas and condensate sales attributable to GDC*:

 

Q3 2017

Q2 2017

Q1 2017

Q4 2016

Q3 2016

Gas sales (mmscf)

 

 

 

 

 

Thermal

157

276

191

322

204

340

175

292

174

290

Retail power

12

20

9

15

7

12

10

16

18

30

Grid power

180

317

508

855

481

801

207

346

186

309

Total (mmscf)

349

613

708

1,192

692

1,153

392

654

378

630

Average gas production (mmscf/d)

6.96

14.59

14.57

7.64

7.14

Condensate sold (bbl.)

2,538

4,452

5,437

9,147

5,290

8,816

4,207

7,011

4013

6,689

* After reaching a cost recovery milestone on Logbaba during Q2 2016, GDC received 60% of revenue from Logbaba in accordance with its participating interest. Prior to this date GDC received 100% of revenues as a recovery of exploration costs. In June 2017, Société Nationale des Hydrocarbures (“SNH”) executed its right to a 5% participation in Logbaba resulting in GDC's participating interest decreasing to 57% and the figures from the effective date onwards have been adjusted accordingly.

Q3 2017 Gross Gas sales from Logbaba of 612.50 mmscf are in line with the Company's expectations for the period given the early wet season from June. GDC's attributable gas sales volumes, are lower than Q3 2016 primarily due to the change in attributable revenues following the SNH participation.

Ahmet Dik, CEO, said; “I am pleased to see the increased December gas sales levels coming through from our new thermal customers. Supply to ENEO continues at strong levels and we shall update the market early 2018 on further gas to power supply. We shall also provide updates on the Matanda and Bomono projects.”



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VOGVictoria Oil & GasCameroonGDCGaz du CamerounENEO

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