VOG.L Share News (VOG)

(Sharecast News) - Cameroon-based gas and condensate producer Victoria Oil & Gas updated the market on the increasing production levels at its Logbaba Project on Monday, reporting an average production rate month-to-date of 8.5mmscfd as at 19 January.The AIM-traded firm said that was a 91% increase on fourth quarter 2018 daily average production levels.Average production for the seven days to 19 January was 9.9mmscfd, with a peak level of 12.96mmscfd reached on 18 January.ENEO consumption levels at the Logbaba Power station had doubled to 30MW since the resumption of the contract in late December, Victoria reported."The company announced on 24 December that Gaz du Cameroun (GDC) had entered into a binding term sheet on 21 December with ENEO Cameroon (ENEO) to resume gas supply to the 30MW Logbaba Power Station," the board explained in its statement.Victoria said fas supply and power distribution began on 22 December.Since the resumption of the contract with ENEO in late December, ENEO consumption levels had doubled from 15MW to the full 30MW at Logbaba, as the equipment was recommissioned.ENEO gas consumption had recently exceeded take or pay levels of 4.88mmscfd."The term sheet with ENEO sets out three-year contract duration with peak delivery of 6.1mmscfd to be made available to the Logbaba station on an 80% minimum take or pay basis throughout the year, which equates to a minimum average additional gas supply of 4.88mmscfd," Victoria said."This differs from the previous contract, which contained a seasonal minimum take or pay element of 90% during the January to June dry season and 30% during the wet season July to December."The initial gas sale price of $6.75 per MMBtu will increase over the three-year term of the agreement by $0.10/MMBtu on each anniversary of the effective date of the agreement."Victoria said that, while gas supply for grid power to ENEO and to others would always be a "key strategy" of the group, the board - as it had previously announced - was focussed on the importance on the diversification of the customer base to reduce dependence on any single customer."Our industrial customers are consuming at record levels as reported in our Q4 18 operations update and the business development of these and other routes to market continue to be developed."