TIDMVOG
RNS Number : 9994L
Victoria Oil & Gas PLC
19 May 2022
19 May 2022
Victoria Oil & Gas Plc
("VOG" or the "Company")
Q1 2022 Operational & Corporate Update
Victoria Oil & Gas Plc, whose wholly owned subsidiary, Gaz
du Cameroun S.A. ("GDC"), is the onshore gas producer and
distributor with operations located in the port city of Douala,
Cameroon, provides shareholders with a brief operations update for
the first quarter of 2022 and an update on corporate matters.
OPERATIONS SUMMARY
-- Sales : Average daily gross gas sales rate for the quarter
was 5.5 MMscf/d (up 4% on Q4 2021: 5.3 MMscf/d), and a gross volume
of 4,691 bbls (Q4 2021: 5,584 bbls) condensate was shipped to
customers.
-- Logbaba Performance : The field has been meeting the demand
using two of the three wells at any one time, with Well La-108
alternating with Well La-107.
-- Matanda : Following the rig tendering exercise, a suitable
rig has been identified in nearby Chad, and this rig would be
capable of drilling deeper Cretaceous targets as well as the
shallower Tertiary targets. As the rig is currently idle, the rig
owner will mobilise the rig to Cameroon whilst contract
negotiations continue.
CORPORATE SUMMARY
Post-Period: RSM Litigation & Suspension of Trading . As
announced on 4 April 2022, the Arbitral Tribunal made its Partial
Final Award under ICC Rules (the "Award") on 1 April 2022. The net
award to RSM was US$12.1 million, with interest and costs to be
agreed by the parties separately.
Neither GDC, nor the VOG Group, has the ability to pay the Award
and accordingly the trading of VOG shares on the London Stock
Exchange was temporarily suspended as of 7.30am on 4 April 2022
pending resolution of this fundamental uncertainty to continue as a
going concern.
As stated in the 4 April 2022 RNS, the parties continue to work
towards a post-award settlement, albeit such settlement cannot be
assured. However, the settlements reached in September 2021 and
January 2022 show that these sorts of agreements are possible.
Hadron Loan Notes: Referring to the GBP1.25 million unsecured
Loan Note entered into in 2021 (the "2021 Note"), which was due to
be repaid by 21 April 2022, Hadron has agreed to not declare an
event of default and stay any enforcement action on the
non-repayment of this Note. Hadron has reserved its position to
take any action in the event that at any time it reasonably
believes that the financial position of the Company is unlikely to
be stabilised. This stay also applies to the GBP1.15 million
unsecured Loan Notes entered into with Hadron on 1 March 2022.
Roy Kelly, Chief Executive of Victoria Oil & Gas, commented
:
"GDC turned in another robust quarter of gas sales, partially
buoyed by the AFCON football competition hosted by Cameroon, and
that performance has continued into the start of the second
quarter.
Despite the post-period Arbitral award, and the suspension of
trading in VOG shares whilst the Company is in a position of
financial uncertainty, it remains very much business as usual at
the operational level whilst we continue to earnestly seek a
post-award settlement.
Our Russian asset is of course not immune from global events and
the international sanctions on the country, though we continue to
receive encouraging interest in the sale process."
LOGBABA UPDATE
Quarterly Production
GDC continues to safely produce and sell natural gas to a
variety of customers in the Douala area. Quarterly gross and net
gas sales and condensate shipments at Logbaba are as follows
(amounts shown in bold represent net gas and condensate sales
attributable to GDC (57%)):
Q1 2022 Q4 2021
Gas sales (MMscf)
--------------------- ------ ------ ------ ------
Thermal 266 466 265 465
------ ------ ------ ------
Industrial power 17 31 14 25
------ ------ ------ ------
Total (MMscf) 283 497 279 490
------ ------ ------ ------
Daily average gross
gas sales rate
(MMscf/d) 5.5 5.3
-------------- --------------
Condensate shipped
(bbls) 2,674 4,691 3,183 5,584
------ ------ ------ ------
Post-period: production was up further in April, with average
daily gross gas sales of 5.9 MMscf/d in the month, and one day at
6.7 MMscf/d, based largely on organic growth.
Logbaba Field Performance
The Logbaba field has now produced a cumulative of over 21 Bcf
of natural gas, having passed the 20 Bcf milestone in July 2021.
Well La-108 reached a cumulative of 1 Bcf gas production in the
period, worth approximately US$12 million in gas sales.
Customers
GDC's online customer count remained around 30 for the period,
though the count finished April at 33.
During January 2022, demand was high, reaching a mid-week peak
of 6.8 MMscf/d gas sales on one occasion, the highest daily rate
for three years.
Look-ahead: GDC is forecasting a growth in demand of 10-20% in
2022 (compared to demand in 2021), from both organic and inorganic
growth. GDC will continue to exercise capital discipline and look
to reduce costs where possible.
MATANDA UPDATE
Site access planning continued during the period. GDC's
community liaison team made several site visits as part of the
permitting process during the period and engaged with the local
chiefs to implement local resident grievance processes along the
planned access route.
The Company has selected an "over-spec" rig, in terms of
horsepower and general capability. Such a rig could drill deeper,
in fact down to 5,100m, meaning Cretaceous targets would be easily
within reach, as well as the primary Tertiary targets (of which
Marula is the first to be drilled). The rig owner, who has a large,
global fleet of over 40 rigs, will mobilise the skid-mounted rig to
Douala.
The Company continues to market the Matanda Farm-Out
opportunity.
WEST MED UPDATE
As a result of the conflict in Ukraine, restrictive
international sanctions have been imposed upon Russia and these
have affected our Russian subsidiary SGI which holds the West Med
asset. In particular, fund transfers have been affected, and our
banks are currently restricting us from transferring funds into
Russia. In addition, a large number of entities and persons have
been designated under international sanctions regimes, meaning such
entities and persons cannot be dealt with. Whilst this will almost
certainly hinder our proposed sale of the asset, we continue to
receive interest in the process.
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Roy Kelly/Rob Collins Tel: +44 (0) 20 7921 8820
Strand Hanson Limited (NOMAD)
Rory Murphy/James Dance Tel: +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited (Broker)
Mark Percy/Toby Gibbs Tel: +44 (0) 207 408 4090
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END
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May 19, 2022 02:00 ET (06:00 GMT)
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