TIDMVOG

RNS Number : 9906U

Victoria Oil & Gas PLC

13 April 2016

13 April 2016

Victoria Oil & Gas Plc

("VOG" or "the Company")

US$26m Debt Facility to Support Logbaba Expansion

Victoria Oil & Gas Plc, the integrated natural gas producing utility, is pleased to announce that its wholly-owned subsidiary Gaz du Cameroun S.A. ("GDC") has agreed a US$26m debt facility to support its production expansion at Logbaba through 2016 and 2017. The facility has been secured with BGFIBank Cameroon S.A. ("BGFIBank"). VOG aims to avoid recourse to equity markets, whilst ensuring gearing is restricted to appropriate levels as the Company continues to build value.

During 2016 VOG intends to increase gas production from the Logbaba Project by 30%, following the 107% increase in average daily production achieved in calendar year 2015. To meet the Cameroon market's demand for gas, key elements of GDC's expansion programme are:

-- Drill 1 twin well and 1 step out well at the Logbaba plant site with the objective of increasing production reserves

   --     Extend the Bonaberi pipeline to customers with gas service agreements in place

-- Increase gas processing plant capacity in three phases to handle expected increased gas flow from wells

It is the Company's objective to fund the Logbaba development through operating revenues and capital contributions from GDC and RSM Production Corporation, our 40% partner. The facility announced today provides more than sufficient financing for GDC to fund its share of the production expansion programme.

Debt Facility

GDC has a well-established banking relationship with BGFIBank, and this new facility extends the existing loan of $4.4m. The debt facility agreed with BGFIBank by GDC is for a total of XAF 15 billion (approx. US$26 million), with the main material terms being:

   --      Repayment period of five years

-- Facility is available for draw down over a 12 month period that can be extended without penalty for a further 12 months

   --      Interest on the debt is 7.15% per annum 
   --      Secured by a pledge over certain receivables and a letter of comfort from the  Company 
   --      No further  financial covenants

Ahmet Dik, Chief Executive Officer of GDC, said: "This is a very important step forward for the Company. Once again, BGFIBank is providing us with flexible debt to help build our business in Cameroon. We have a highly effective working relationship with BGFIBank, and we continue to benefit from its high level of professionalism and capacity to deliver solutions appropriate to our needs. The 2016-17 production expansion programme for GDC has been carefully planned and we are committed to delivering increased levels of gas to customers within budget and without the Company having recourse to equity markets."

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.

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. In addition, VOG has recently acquired a 75% participating interest in the Matanda block, which neighbours the Logbaba block.

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

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