"a very strong position."27 Dec 2018 08:58
https://www.malcysblog.com/
Victoria Oil & Gas
Christmas has come a day early for long suffering shareholders in VOG, nearly a year after ENEO pulled the rug and a new, better contract has been signed. Increasingly long power-outs leading to unrest and industry protests has meant that VOG is now in a stronger position than before and that is not including the changes to the business model that the company have made since the original contract was lost.
This long term gas supply contract with ENEO, due to last for three years, gives stability and higher prices all the year round rather than the old one which moved sharply from season to season. GDC will deliver peak quantities of 6.1 mmscf/d to the ENEO Logbaba power station with a minimum base load of 80%, 4.9 mmscf/d as a take or pay over the year which will increase current daily gas average consumption by more than 100% to approximately 8.8 mmscf/d. Prices are $6.75 up to $6.95 per MMBtu which increases over the contract term. The is even some potential upside from this as ENEO’s 20 MW Bassa Power Station in Douala also offers ‘a platform for further gas sales opportunities’.
2018 will be best forgotten for VOG and its shareholders, whilst the management has always been confident that a resolution would be reached many milestones passed without restoration of the contract. The really good news is that not only have they got a pretty solid three year deal, they have been upgrading the business margin in the remainder of the company’s commercial areas. In absence of the ENEO contract local companies have tied in to GDC gas for a variety of needs such as thermal and industrial power needs where new customers have been brought on stream. Add to that the potential for the CNG developments with Naturelgaz and once again VOG should be in a very strong position.
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