Victoria Oil & Gas Sells 24% More Gas in 2016
UK-listed Cameroon gas producer Victoria Oil & Gas sold 24% more gas in 2016 than in 2015, totalling 3.566bn ft³, it said May 26, as production was also proportionately up, at an average 10.23mn ft³/day from 8.13mn ft³/d.
The extra sales were made to two power stations in the port city of Douala and by expanding thermal gas customer base, especially on the Bonaberi side of the Wouri River, which VOG "presciently" laid a pipeline beneath in 2014, expecting the industrial base there to grow.
But it wrote down $22.7mn on a Logbaba well, La-106 – which it described as a non-cash impairment – and overall it made a pre-tax loss of $30mn, compared with a profit of $1.6mn in 2015.
Future production prospects have also grown, following the assignment to the company of 75% in the licence for the 1,235km² Matanda Block adding 2.8 trillion ft³ net prospective resources in Northern Matanda Field, it said. And the Logbaba drilling programme has begun, targeting additional gas reserves.
Revenue was up 53% to $32.8mn and it reached a production milestone: VOG local subsidiary Gaz Du Cameroun's farm-in partner, US-based RSM Corp, has received 40% of revenues as of June 1, 2016 following a dispute settlement. Subsequently, RSM requested arbitration over a separate issue.
Underlying pre-tax profit (Ebitda) was $13.1mn, compared with 2015's $8.5mn. It also reported the termination of 1.2% royalty and reserve bonus following mediated settlement and made an unspecified provision for a Logbaba land claim which previously was contingent.
VOG chairman Kevin Foo said: "The assignment of majority interests in the Matanda and Bomono licenses, coupled with our expanding Logbaba operations and gas market will prove to be the transformational events for 2016 and early 2017. As sole gas supplier to the Douala region, which we estimate demand of more than 150mn ft³/d of gas, I envisage that the new areas will help us become the dominant player in the Douala Basin." CEO Ahmet Dik said that "even at record production levels, we meet less than 10% of local demand as the city's industrial economy grows."
Reprocessing and interpretation of existing seismic and well data from across the combined area of 3,500km² throughout Logbaba, Matanda and Bomono blocks focuses on increasing gas reserves and production to supply an energy hungry and growing industrial market further gas to power projects, VOG said.
William Powell