Victoria Oil & Gas, a Cameroon based gas producer and distributor, has provided an operations update for the second quarter of 2020.
- The Company remains vigilant in relation to the Covid-19 pandemic and adherent to the authorities’ guidelines in the jurisdictions in which it works: the lockdown in Cameroon was eased in May 2020, but a restrictive lockdown persists in the YaNAO region of the FSU where our West Medvezhye asset is located.
- Daily average gross gas sales rate for the quarter of 4.6 mmscf/d (Q1 20: 5.1 mmscf/d) of natural gas plus gross 3,548 bbls (Q1 20: 1,343 bbls) condensate was produced safely and sold to industrial customers, resulting in net revenues of US$6.8 million (unaudited) (Q1 20: US$5.3 million).
- The grid power customer ENEO Cameroon S.A. (“ENEO”) was served notice of termination, having been given further opportunities to clear its debts.
- In the short-term, we have lined up sales to replace over 30% of the grid power customer’s Take-or-Pay volumes at a higher price margin via increased demand from existing customers, and at least 2 new customers expected to be tied in within the next 3 months. These increased sales already represent replacement of over 50% of the revenue lost through the termination of the ENEO contract.
- Following an analysis of the current well stock, and recognizing there are no short-term plans for further drilling at this time, management has reduced its estimated Proved Reserves (“1P”) for the Logbaba Field.
- The large, in-place resource estimate remains unchanged, and the revised 1P Reserves, without additional drilling, still provide for several years of supply with or without the grid power demand.
- Following an extensive prospect evaluation and derisking of the Matanda Licence, management has materially increased its estimate of Prospective Resources for the Onshore part of the Licence, which is contiguous with Logbaba.
- The Matanda partners, GDC and Afex Global Ltd, continue discussions with the Government in Cameroon and remain optimistic of obtaining an extension as previously guided.
Roy Kelly, Chief Executive of the Company, commented:
‘We are pleased with the resilience the Cameroon business has shown through recent times and the early strides made to replace the gas sales volumes previously allotted to ENEO. 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. The work programme on Matanda has yielded encouraging and significant prospectivity on the licence, in what is a rich hydrocarbon province. We are also encouraged by the unsolicited interest in the SGI asset.’
Source: Victoria Oil & Gas