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Victoria Oil & Gas PLC  -  VOG   

Result of AGM and Operational Update

Released 07:00 30-Nov-2012

RNS Number : 3814S
Victoria Oil & Gas PLC
30 November 2012
 



30 November 2012

 

Victoria Oil & Gas Plc

("VOG" or "the Company")

 

Result of Annual General Meeting and Operational Update

 

Highlights

 

·     Six customers taking gas from Logbaba following the commissioning of an additional customer

 

·     Average daily production of 1.4 million standard cubic feet per day ("mmscf/d") with peak daily production of 2.1mmscf/d

 

·     Year-end production for thermal customers expected to be 5.2mmscf/d peak and 3.5mmscf/d average

 

·     Five further thermal Gas Sales Agreements ("GSA") signed bringing total to 25

 

·     One further power Letter of Intent ("LOI") signed bringing total to seven

 

·     All resolutions passed at the Annual General Meeting

 

Operational Update

 

VOG, the AIM quoted oil and gas exploration and production company with assets in Cameroon and the FSU, is pleased to announce that a packaging company has become the latest customer to be commissioned to take gas and commenced gas consumption yesterday. From the existing six customers taking gas, the Company calculates a combined peak demand of 2.1mmscf/d and an average daily consumption of 1.4mmscf/d during a standard operating week.

 

Since our last update on 14 November 2012, good progress continues to be made on contracted thermal customers with an additional four customers having signed thermal GSAs making a total of 25 contracted thermal customers. All contracts have been signed at $16 per million British thermal units.

 

While gas is being supplied to six customers, there are 19 that await conversion of their facilities to take gas. Currently, nine contracted customers have conversion projects underway and assuming no engineering delays, all are anticipated to commence gas consumption before the end of December 2012. The next thermal conversion is anticipated to come on line by the middle of next week followed by three additional customers the following week. We shall update the market in due course on further progress.

 

The Company has signed one further LOI for the provision of power to customers. This brings the total number of power LOIs to seven.

 

The Company expects to exceed the production guidance provided in August 2012 for thermal energy provision by the end of the year but, given additional capital required to support its power strategy, VOG anticipates gas consumption from its first power customer following completion of a financing package with a leading European bank that is currently under negotiation and is at an advanced stage.

 

The Company's latest guidance for installed peak and average demand from connected customers at December 2012 is as follows:

 

 

Connected Customers Demand at Year-End 2012 (mmscf/d)

 

Peak

Daily Average*

Thermal

 

5.2

3.5

Power

nil

nil

Total

5.2

3.5

*Assumes a 7 day operating week for all customers (some customers operate only 5 or 6 days per week)

 

Kevin Foo, Chairman of VOG commented, "We are very pleased with progress made on conversion work with existing contracted customers and the excellent sales strike rates. As each new customer is connected, and receives the benefit of reliable and more cost effective energy supply, we are receiving increasing levels of enquiries from other potential clients in Douala. We have now got momentum and have the potential to double the number of contracted customers within 6 to 12 months.

 

In the New Year, we will see the Company continue to increase its thermal customer base and begin our first power sales. The power market potential in the region is very exciting and will be the driver of production growth."

 

Result of AGM

 

At the Annual General Meeting of the Company held at 11.00am yesterday, all of the resolutions proposed in the notice of meeting sent to shareholders dated 2 November 2012 were duly passed.

 

For further information, please visit www.victoriaoilandgas.com or contact:

 

Victoria Oil & Gas Plc

Kevin Foo / Martin Devine

Tel:  +44 (0) 20 7921 8820

Macquarie Capital (Europe) Limited

Jeffrey Auld / Steve Baldwin / Nicholas Harland

Tel: +44 (0) 20 3037 2000

Fox-Davies Capital

Daniel Fox-Davies/ Richard Hail

Tel:  +44 (0) 20 3463 5010

Strand Hanson Limited

Simon Raggett / Angela Hallett

Tel:  +44 (0) 20 7409 3494

Tavistock Communications

Ed Portman / Conrad Harrington / Simon Hudson

Tel:  +44 (0) 20 7920 3150

 

About Victoria Oil & Gas

Victoria Oil & Gas Plc is an independent oil and gas exploration and production company with projects in Africa and the FSU. The Company's principal assets are the Logbaba gas and condensate project in Cameroon and the West Medvezhye project in Siberia, Russia. Logbaba is located in Douala, the economic capital of Cameroon. The field was discovered in the 1950s when all four exploration wells drilled at the time encountered gas. The Company drilled two successful development wells in 2009/10 and was awarded an Exploitation Licence in April 2011.

 

The Company's Logbaba total proved and probable reserves are sufficient to supply an average of 30 mmscf/d for the next 20 years to industrial customers. Under current management projections, the Company forecasts industrial gas demand to rise to 44 mmscf/d by the end of 2014. In the longer term, as further reserves may be proven, gas may also be supplied to large gas fired power stations connected to the grid, with either VOG investing in an independent power producer joint venture or selling the gas to third parties. The Company has signed a multitude of gas sales agreements with industrial customers to serve their energy requirements and anticipates in excess of 40 customers over the medium term.

 

West Medvezhye is situated in the prolific Yamal-Nenetsk hydrocarbon region in Siberia. An independent audit, carried out by Mineral LLC in 2011, estimated prospective resources for the area of over 1.4 billion barrels of oil equivalent ('boe'). The Company also has a discovery well, 103, with C1 and C2 reserves, independently assessed under the Russian classification convention of 14.4 million boe as approved by the Russian Ministry of Natural Resources.

 

Development studies are in progress to commercialise the Well-103 discovery and prospective resources and a detailed well design study for the upcoming drilling campaign has commenced.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Result of AGM and Operational Update - RNS