VOG.L Share News (VOG)

LONDON (Alliance News) - Cameroon-focused Victoria Oil & Gas PLC on Friday said gas production and sales declined in the second quarter of its current financial year due to termination of gas supply deal with ENEO Cameroon SA.

The London-listed oil & gas producer said average gas production in the three months ended June 30 declined to 3.3 million standard cubic feet per day, compared to the 14.59 million standard cubic feet per day the previous quarter and 3.5 million standard cubic feet per day in the first quarter.

Gas sales fell to 320.0 million standard cubic feet from 1.19 billion standard cubic feet in the second quarter of 2017 and 330.0 million standard cubic feet in the first quarter.

Condensate sales also fell to 2,907 barrels, from 2,900 barrels in the first quarter and 9,147 barrels the same period the year before.

At the end of 2017, ENEO has decided not to extend a gas supply agreement with Victoria's subsidiary Gaz du Cameroun SA and has consequently ceased taking gas from the unit.

As a result of sales to ENEO not recommencing during the second quarter of 2018, the gas consumption levels from Gaz du Cameroun's 57% participating interest in the Logbaba project in are at similar levels to those reported in the first quarter of 2018.

Looking forward, Victoria continues to seek a resolution to the suspension of sales to the ENEO owned Logbaba and Bassa power stations in Douala. The company also highlighted that the shortfalls in power supply in Cameroon continue, with hydroelectric schemes not meeting the current demand.

Meanwhile, Gaz du Cameroun commissioned one new thermal customer and one new retail power customer. The company said several existing and new customers have expressed interest in the retail power solutions which Gaz du Cameroun is offering, due to the current power shortages in Douala.

In addition, an existing thermal customer, Camlait, commissioned a retail power solution, Victoria said. Thus, production levels have increased from 3.3 million standard cubic feet per day during the second quarter 2018 to 4.4 million standard cubic feet per day during August.

Shares in Victoria were trading 2.8% lower on Friday at 31.78 pence each.