GLNCY Glencore Plc (PK)

By Alex MacDonald

LONDON--Glencore PLC (GLEN.LN) has exited one of its three prospects in Cameroon as it continues to take steps to contain costs and cash in a bid to reduce its hefty net debt burden given the current commodities turmoil.

The Switzerland-based commodities trader and producer has transferred its 75% stake in the Matanda Block to Cameroon-focused energy utility Victoria Oil & Gas PLC (VOG.LN) in return for the latter assuming responsibility for designing a work program with the government of Cameroon to develop the prospect.

This leaves Glencore with two offshore Cameroonian prospects on its books: its 100%-owned Bolongo and its 23.33% stake in Tilapia.

For Victoria Oil & Gas, the acquisition of a majority stake in Matanda complements its existing strategy of producing more natural gas to meet Cameroon's growing energy needs.

The 1,235 square kilometer Matanda block contains the North Matanda Field, which is estimated to contain 1.8 trillion cubic feet of gas and 136 million barrels of gas condensate. The block is located next to Victoria's already-producing onshore Logbaba. The Matanda block is more than 60 times greater than the adjacent concession.

Once Cameroon approves the deal, Victoria Oil and Gas will submit a new work program alongside its partner AFEX to the government of Cameroon with a view to starting a seismic survey in the fourth quarter. AFEX owns the remaining 25% stake in Mutanda.

-Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

February 18, 2016 03:57 ET (08:57 GMT)

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