TIDMVOG
RNS Number : 5718V
Victoria Oil & Gas PLC
19 April 2016
19 April 2016
Victoria Oil & Gas Plc
("VOG" or "the Company")
Q1 2016 Operations Update
Victoria Oil & Gas Plc provides an update on the Company's
operations for the three month period ended 31 March 2016 (the
"quarter" or "Q1").
Overview
Today's update sees increased gas consumption as the first
quarter of the dry season passes. The quarter also saw the
provisional assignment of the Matanda block, located adjacent to
existing Logbaba operations and commencement of work on the
pipeline extension in Bonaberi. The Company also began engineering
for the most important project for this year; the drilling of two
wells at Logbaba.
Highlights
-- 13.2mmscf/d Q1 2016 average gas production (Q1 2015: 4.5mmscf/d)
-- 180% increase in gas sales to 1,131mmscf compared to Q1 2015 (404mmscf)
-- Q1 unaudited financial highlights:
o $12.8m revenue (Q4 2015: $7.6m)
o $11.5m cash position at quarter end (Q4 2015: $13.1m)
o $4.6m net cash position at quarter end (Q4 2015: $5.9m)*
-- Post quarter end
o Completion of the Matanda acquisition
o $26m debt facility with BGFIBank secured
o Drilling contract signed and rig loaded on vessel
*Net cash is defined as cash equivalents less borrowings, where
cash equivalents exceed borrowings.
Operational update
The quarterly gas and condensate consumption is as follows:
Q1 Q4 Q3 Q2 Q1
2016 2015 2015 2015 2015
--------------- -------- ------ ------ -------- ------
Gas sales
(mmscf)
--------------- -------- ------ ------ -------- ------
Thermal 250.6 236.3 266.7 209.5 250.3
--------------- -------- ------ ------ -------- ------
Retail Power 37.0 79.0 83.3 93.0 90.4
--------------- -------- ------ ------ -------- ------
Grid Power 843.6 310.3 367.6 817.5 63.9
--------------- -------- ------ ------ -------- ------
Total (mmscf) 1,131.2 625.6 717.6 1,120.0 404.6
--------------- -------- ------ ------ -------- ------
Average gas
production
(mmscf/d) 13.16 7.14 8.19 12.6 4.5
--------------- -------- ------ ------ -------- ------
Condensate 10,
sold (bbls) 13,591 8,608 878 13,445 6,345
--------------- -------- ------ ------ -------- ------
These figures are in line with internal expectations as the
quarter covered the first half of the dry season where gas
consumption in the grid power sector is typically higher due to
lower availability of hydroelectric power and the associated higher
utilisation of gas.
Our operations maintained a 100% safety record and ensured an
uninterrupted gas supply through our integrated network to all
customers across thermal, power and condensate markets.
The Matanda block assignment and subsequent Government approval
and the US$26m BGFIBank debt facility were announced in April. To
deliver these results, the team at Gaz du Cameroun S.A. ("GDC")
worked closely throughout the period with various parties including
the Government of Cameroon, Glencore, Afex Global Limited ("AFEX")
and BGFIBank. Our success in securing a major new field for
potential source of additional gas and a debt facility from a local
banking group is a significant step forward in our strategy of
building a material gas supply business, within Cameroon. The
securing of the Matanda block was very significant for our mid to
long-term gas development plans. Following approval of the work
programme at the forthcoming Operating Committee meeting, we would
expect to begin first work on Matanda at the end of 2016, once we
have completed the Logbaba Drilling Campaign. Similarly, obtaining
the BGFIBank facility gives the Company adequate funding to support
its share of the capital programme underway.
In our 28 January 2016 RNS outlining the 2016 strategy, we
indicated that a major part of our work this year will concentrate
on expanding our gas supply and extending our pipeline reach on the
Bonaberi shore. The primary objectives of enhancing the Company's
production capabilities make up the supply expansion programme as
follows:
-- Drilling Campaign
-- Staggered gas plant expansion for increased gas processing matched to well results
-- Extension of pipeline on the Bonaberi shore to economic
customer clusters with Gas Supply Agreements in place
Logbaba Drilling Campaign
GDC is preparing to drill two wells into the onshore Cameroon
Logbaba Field to supplement the two existing Logbaba production
wells. The new Logbaba wells are required to meet the growing
market demand for Logbaba gas, to develop Logbaba reserves, and to
move some of our 2P (Proven plus Probable) reserves into the 1P
(Proven) reserve category. One of the wells will twin the La-104
well drilled in 1957; the other well will be a 'step-out' well that
will be drilled into a target that is intended to prove up more of
our Probable reserves. Both of the wells will be drilled
directionally from a drilling pad adjacent to the Logbaba Gas Plant
and they are to be tied into our production facilities immediately
after they are drilled and completed. The La-104 twin well is
almost vertical; the 'step-out' well will be drilled to intersect a
target that is about 1,100m to the south-east of the Logbaba
drilling pad.
Both wells are intended to be production wells from the Logbaba
Formation, which is a thick sequence of interbedded sands and
shales found at depths between 1,700m and 3,200m below the surface.
In addition to developing the gas reserves in the Logbaba
Formation, one of the wells, the La-104 twin, has an additional
objective of an 'exploration tail.' This is to be drilled from the
base of the Logbaba Formation down to 4,200m below the surface to
test the hydrocarbon potential of the Mundeck Formation which had
gas shows in La-104.
A contract has been signed with Savannah Oil Services Cameroon
to provide the drilling rig for the project and the rig is
currently on a ship to Cameroon. The rig will be mounted on tracks
between the two well locations, allowing efficient drilling to be
undertaken using a single unit. SPD Petrofac is providing well
design and project management services and with their assistance we
are now working on the detailed design and programme
preparation.
Major site preparation work is underway including slope
stabilisation, full security fence line, leveling for drilling rig
track and drilling pad preparation. New warehousing for rig
supplies, storage and camp civils are also under construction.
Long-lead orders have been placed.
GDC remains on schedule to meet its objectives and the current
plan is to commence drilling in late Q2 and completing by end of
2016.
A detailed budget for the two well drilling programme has been
completed. The budget total is less than $40m, significantly lower
than initial estimates made in 2015.
Commencement of this programme has resulted in some preliminary
expenditure as we begin to invest in longer lead items. The cash
position at the quarter end is commensurate with this planned
expenditure.
Logbaba Gas Plant Capacity Expansion
The process plant expansion study has been completed. Stage one
of gas plant expansion to 25mmscf/d capacity (from 20mmscf/d) is in
the preliminary engineering phase. Further phases will commence to
tie in with well results.
Bonaberi pipeline extension
An agreement was reached with SATOM, a road construction
company, to lay GDC gas pipe and a bitumen road at the same time.
2.1Km of pipeline has been laid during the quarter to be
commissioned in phases over the next quarter. New thermal customers
are scheduled to come on line Q2 2016.
GDC Chief Executive Officer and VOG Director Ahmet Dik said:
"The seasonal increase in our gas supply is in line with our
internal expectations and demonstrates a level of sales stability.
Selling to multiple customers and markets allows GDC to maximise
the value from our fully integrated gas pipeline. However, both the
average figures and daily supply peaks show we are very near
comfortable production capacity.
With this in mind, I am extremely pleased with progress made on
the gas expansion capital projects by GDC. This quarter was pivotal
to staying on schedule and with the drilling rig in transit, key
drill site preparation work and the BGFIBank facility secured, we
have delivered on all the critical path items in our timetable.
Our collaborative approach to laying pipe in Bonaberi with the
road construction company SATOM has also achieved fast, cost
effective results. This has allowed us to control costs, minimise
delays and the environmental impact on the local area, ensuring we
remain on target to deliver the first phase of the 2016 Bonaberi
pipeline extension.
For further information, please visit www.victoriaoilandgas.com
or contact:
Victoria Oil & Gas Plc
Kevin Foo / Laurence Read Tel: +44 (0) 20 7921 8820
Numis Securities
John Prior / Ben Stoop Tel: +44 (0) 20 7260 1000
Strand Hanson Limited
Angela Hallett / Rory Murphy Tel: +44 (0) 20 7409 3494
Bell Pottinger
Daniel Thöle / Charles Stewart / Zara de Belder Tel: +44 (0) 20
3772 2499
Notes to Editors
About Victoria Oil & Gas Plc
Victoria Oil & Gas (VOG.L) is a gas utility company.
(MORE TO FOLLOW) Dow Jones Newswires
April 19, 2016 02:01 ET (06:01 GMT)
The Company's subsidiary, Gaz du Cameroun S.A. ("GDC") owns a
60% participating interest and operates the onshore Logbaba Gas
Project. The Logbaba Gas Project supplies cost effective, clean and
reliable natural gas to industries in the Douala region of
Cameroon. RSM Production Corporation, an affiliate of Grynberg
Petroleum Company of Denver, Colorado holds the remaining 40%
participating interest. In addition, VOG has recently been assigned
a 75% participating interest in the Matanda block, which neighbours
the Logbaba block. The remaining 25% participating interest is held
by AFEX.
VOG also holds 100% of the West Medvezhye oil and gas
exploration project near Nadym, Russia. Given the challenging
economic environment in Russia, The Group has fully impaired the
West Medvezhye assets.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCSFDESAFMSEIL
(END) Dow Jones Newswires
April 19, 2016 02:01 ET (06:01 GMT)
Victoria Oil & Gas (LSE:VOG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Victoria Oil & Gas (LSE:VOG)
Historical Stock Chart
From Apr 2023 to Apr 2024