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Production Update, Cameroon

17 Apr 2015

9.4 mmscf/d Production Update

Logbaba Power Station Installation Nears Completion

Highlights

  • Achieved 9.4 mmscf/d average gas production average (7 day) following Phase 1 ENEO connections

- 114% increase in gas supply to customers since beginning of 2015

- 10.5 mmscf/d peak production rate

- 9.6 mmscf/d 5 day working week average (high demand period)

  • Take-or-pay gas supply agreement triggered at 20MW Bassa power station
  • Balance of Gensets cleared customs, under installation at 30MW Logbaba Power Station

Victoria Oil & Gas PLC (AIM: VOG) today announces that gas supply to industrial customers in Cameroon, from its wholly owned subsidiary Gaz du Cameroun S.A. (“GDC”), has risen to 9.4 mmscf/d on a seven-day average basis following increased production to feed the Bassa power station. This production rate marks a 114% increase from the beginning of the year on a seven-day weekly average basis. The five-day ‘working week’ average, the high use period for GDC, is now at 9.6 mmscf/d with a peak production rate of 10.5 mmscf/d.

The Bassa Power station is supplied with gas under an agreement signed with ENEO Cameroon S.A (“ENEO”), a company partly owned and operated by UK based Actis and the state power company in Cameroon. GDC is responsible for supplying gas to both the Bassa and Logbaba power stations, where electricity is generated from gas fired electricity generation sets (“Gensets”) supplied and operated by project partners Altaaqa Global (“Altaaqa”).

Under the terms signed with ENEO, minimum take or pay elements come on-line guaranteeing fixed levels of revenue for the Company, once 20MW of power is made available at Bassa and 50MW of power is made available at both Bassa and Logbaba power stations. A maximum combined power generation of approximately 50MW equates to 10.1 mmscf/d of gas with the minimum take-or-pay terms requiring payment for 90% of this during the dry season (January-June), and 30% in the wet season (July-December), at a fixed price of US$9/mmbtu. Take-or-pay obligations have been satisfied at the Bassa Power Station, following consistent generation of 20MW of power.

The completion of the Logbaba power station has now entered its final phase, with all remaining Gensets released from customs and being installed by Altaaqa. The installation is expected to be completed soon and Logbaba will thereafter meet its 30MW supply target (6.06 mmscf/d).

Kevin Foo, Executive Chairman, said: “Our gas production has doubled since the beginning of the year, and for the first time our peak production has broken the 10 mmscf/d threshold. This is a big achievement for VOG and the continuation of what I expect to be a successful 2015 for the Company.” 

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