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    Victoria Replaces 30% of Lost Cameroon Sales


The company has also managed to cover over 50% of the revenues it would have earned under a terminated contract with power generator Eneo.

by: Joseph Murphy

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Natural Gas & LNG News, Africa, Premium, Corporate, Contracts and tenders, News By Country, Cameroon

Victoria Replaces 30% of Lost Cameroon Sales

London-listed Victoria Oil & Gas has managed to find buyers for almost a third of the take-or-pay gas it was selling to Cameroonian power generator Eneo under a contract terminated earlier this month, it said on July 27.

Victoria cancelled the contract for gas from its Logbaba project after Eneo stopped paying for supplies, racking up a $16mn debt. However, Victoria said it had lined up sales to cover 31% of the take-or-pay volumes, and at higher prices, meaning it has replaced over 50% of the lost revenues.

The company serves over 30 customers and aims to connect up two more by September. It will look to tie in additional customers some distance from its infrastructure in clusters to justify the expenditure, it said.

"We are pleased with the resilience the Cameroon business has shown through recent times and the early strides to replace the gas sales volumes previously allotted to Eneo," Victoria CEO Roy Kelly said.

Victoria produced 4.6mn ft3/d of gas in Cameroon in the three months ending June 30, versus 5.1mn ft3/d in the previous quarter.It has no plans for further drilling in the short-term, and has subsequently reduced its estimate for Logbaba's proven reserves from 68 to 19bn ft3, although its estimate for in-place resources is unchanged.

"The Logbaba reserves reduction reflects adjustments based on the current well stock but leaves the company with years of supply with or without the grid power demand even without further development drilling," Kelly said.

Victoria also reported a bump in gross unrisked mean prospective resources at the Matanda licence in Cameroon from 903bn ft3 to 1.196 trillion ft3. It is meanwhile courting buyers for the Western Medvezhye field in Russia's Yamalo-Nenets region, after completing a third-party technical report.

A prospective buyer is now conducting due diligence, but Victoria cautioned that a sale would take time because of the Covid-19 crisis and low oil prices.