Member Info for happysparrow

Yes, definitely very interesting developments here. I'm currently sitting on the sidelines; will probably wait to see what deal transpires first (and when). Agreed, Hadron could well be holding the price back for now - will need to see if they continue to sell before dipping my toe in here. Perhaps I'm too cautious and will miss the boat. Who knows.
GLA

Thanks, SR123 - so it's back to Rift's 'so 15% in 2 months is a return they'd probably like to top slice or fully slice, if they're not around for the big production deal' - in other words, they are perhaps closing their investment here?

interesting post from Rayfenn on advfn:
' "We offered to develop, in less than a month in Douala, a 300 MW electricity generation project, which will immediately start producing electricity at less than XAF40 per kilowatt," said Zeynep Harezi, Karpowership's commercial director. All well and good but electricity generated by AKSA's new power plant works out at XAF28 per kilowatt based on paying VOG $6.75 per bbtu of gas. In other words elecy from the ship is much more expensive than from using VOG gas....'.

From RNS 20/01/16: GDC price for gas to customers ranged from $9 to $16 per mmbtu, a weighted average price of more than $60/BOE.

From RNS 26/06/17: Eneo contract extended to 31/12/17, and interim gas price of $7.5 mmbtu has been agreed. (They take more than 50% of our gas)

From RNS 22/10/18 : average gas price to customers now about $13 per mmbtu.

From RNS 24/12/18: Eneo contract renewed at gas price of $6.75-6.95 mmbtu.

From the above, the point I wish to make is that if Karpowership produces at XAF40 per kilowatt, and AKSA at XAF28 per kilowatt (giving us $6.75 per mmbbtu), then there is considerable scope (a competitive price gap) to increase the price paid by Eneo for short-term supply through Altaaqa gensets at Logbaba power plant.

Karpowership and Altaaqa gensets are the two current alternatives for an immediate increase in supply; whereas AKSA power plant (reliant on Etinde FID and pipeline build) is probably one year or more away.

So, if Eneo needs supply asap, which their recent re-financing, their quick settlement with VOG, the recent powercuts, and the trouble with hydropower projects, all suggest, then I would not be surprised to see VOG negotiating $9+ per mmbtu for a one to two year contract.

Ray - any thoughts on this? (perhaps post your reply and calculations, on the other side, please).

I make that about £450,000 reduction in holding.
As a major shareholder in both SEY and VOG, Hadron Capital recently lent VOG £1.25m, in exchange for 6p warrants (they couldn't buy in the market without pushing the VOG share price sky-high). Now cutting holdings elsewhere in order to pay out loan monies?

That means that if all parties want to get re-supply done, its possible that we could be supplying Eneo with gas before the end of May !

Power plant can be installed in 7 to 14 days.
https://www.youtube.com/watch?v=60gMwceRm4c

https://www.businessincameroon.com/public-management/2004-11484-cameroon-enters-the-top-3-of-dangote-cement-s-most-dynamic-subsidiaries

https://www.businessincameroon.com/energy/2801-11233-turkish-karpowership-offers-to-produce-300mw-of-electrical-energy-at-the-port-of-douala

Yes - we've heard no more on this. Seemed to have great potential. Should be cheaper to take onshore piped gas already at Douala than shipping in LNG.

Yes, agree with some of that. I think the quote is from about Summer this year, after we began legal proceedings against Eneo for debt recovery (the article doesn't make this clear). Too, I think RF68 said Altaaqa had removed the gensets from Logbaba about this November and shipped them elsewhere, though I can't find information on this. Clearly before Logbaba could be operational Eneo will have to settle their debt (presumably very soon as Vog's debt is now settled), reinstall the gensets, and a gas supply agreement made with us. Eneo needs the gas, and all this can be done, and quickly, if the will is there on all sides.
So, does Vog want to do this (Eneo clearly does as they initiated the recent amicable debt settlement)? NOT under the previous terms - I agree. Firstly, as Barony on advfn suggested 'Re future business, easily done if a guaranteed letter of credit can be arranged, before supplying gas. Did that with Cuba forty years ago. We should supply gas and invoice against the loc.'; and secondly, it would have to be supply at a much higher unit cost than before. (But we are drilling probably in Q4 this year - there's over a tcf of gas at Matanda - so we should be in a position to supply more in bulk - both Logbaba, and Bekomo, and help transit the Etinde gas, in due course.). Clearly Eneo (and the government) are working at getting the sector back on track, and they very much need VOG's gas and cooperation. So, as ever, can VOG and Eneo meet at an acceptable price. I'm sure such discussions are continuing (of course, it would be good to have this confirmed one way or other, in the coming Q1 update); but whether agreement will be reached, and when, who knows.

Thanks, Forest.
This is of particular note:
“ It should first be noted that the substance of this dispute does not relate to invoices, but to the conditions for resuming gas and electricity production on the Logbaba site. And this is the essence of the matter, ”explained the CEO of Eneo in an interview with Business in Cameroon .

Emphasis: RESUMING gas and electricity production on the Logbaba site. !!!

From Bowleven RNS:
https://otp.investis.com/clients/uk/bowleven1/rns/regulatory-story.aspx?cid=1058&newsid=1465282
On the previously approved Aksa 150 MW thermal power plant based at Bekoko, close to the city of Douala, we understand there have been detailed discussions between Aksa, SNH, ENEO and Victoria Oil and Gas plc ('VOG'). We understand that an electricity price may have been agreed and that some commercial discussions have been undertaken on matters such as gas demand and pipeline tariffs. As part of the Gas Master Plan for the country, SNH have confirmed they will build a pipeline between Limbe and Bekoko to transport gas purchased from Etinde to supply to the Aksa power plant in Bekoko and other potential customers in the Port of Douala vicinity. There have been no discussions on gas supply agreements between us, SNH, Aksa and VOG. We expect these to progress in 2021.

Correction:
Q1 update - last week of April.
S5m Eneo payment - before 14th May
West Med - sale exclusivity to 31st May
Kemerkol - if no amicable dispute resolution by end of May, legal proceedings begin.
Matanda - farm-out process begun (so anytime in next 4 months?)
Q2 update - end of July

Q1 update - last week of April.
S5m Eneo payment - before 14th May
West Med - sale exclusivity to 31st May
Kemerkol - if no amicable dispute resolution, legal proceedings begin.
Matanda - farm-out process begun (so anytime in next 4 months?)
Q2 update - end of July

https://projectsportal.afdb.org/dataportal/VProject/show/P-CM-FAA-002

https://www.energymixreport.com/bgfi-cameroon-reported-on-83bn-fcfa-deal-in-electricity-sector/
Perhaps VOG will supply Dibamba in due course?

Note: Our debt facility is with BGFI bank too:
https://polaris.brighterir.com/public/victoria_oil_gas_plc/news/rns/story/x4d1dpx
Our current debt is about $10.7m? (as at 31/12/19)

Quick work:
'The Cameroonian Minister of Finance, Louis Paul Motazé, signed at the end of last week the document confirming the takeover by the Public Treasury, of the debt of the aluminum producer Alucam (Cameroonian Aluminum Company) , vis-à-vis Eneo, the concessionaire of the public electricity service in the country, reveals a source familiar with the matter.'

'End of last week' And Roy had the Eneo debt settled by close of play Friday! (with payment within 30 days).

Settlement with Eneo Cameroon S.A. ("Eneo")

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, is pleased to provide shareholders with an update on a settlement agreement with Eneo.

On 16 April 2021, GDC signed a settlement agreement with Eneo which will result in the payment of the gross amount to GDC, within 30 days of the signing, of approximately 2.74 billion FCFA (Central African CFA franc) (circa US$5 million). This settlement relates to the Take-or-Pay invoices for October, November and December 2019 plus associated interest. During this period for which Take-or-Pay invoices were issued, gas was not being supplied to Eneo because there was no demand.

At the time of the termination of the contract with Eneo in July 2020, VOG had ten Take-or-Pay invoices outstanding. With this settlement, the Company has now recovered four out of ten of these outstanding invoices plus interest to February 2021.

All of the amounts invoiced to Eneo were fully provided for in the Annual Accounts for the year ended 31 December 2019 and the Interim Statement for the period to 30 June 2020. The payment to GDC will represent full and final settlement for all amounts invoiced to Eneo.

Roy Kelly, Chief Executive of the Company, commented:

"We are very pleased to have settled another legacy issue without recourse to time-consuming and expensive litigation or arbitration, as such legal costs have been crippling the company in recent years. Arbitration would be under Cameroonian law and could take several years.

We believe the avoidance of further legal costs in pursuit of the Eneo receivables is in the best interests of shareholders and partners, and allows management to focus on the business and strategy."

https://www.londonstockexchange.com/news-article/VOG/settlement-with-eneo-cameroon-s-a-eneo-/14943214

Next definite update - Q12021 update due last week of April (26th-30th).

This was also notable in the interview:
'BIC: After the XAF45 billion you received from the government in mid-2020, the government was supposed to pay another XAF32 billion to settle part of the debt it owes you. Has it done so already?

EM: Discussions are underway and will soon be concluded in line with the government’s strong determination to normalize the sector.'

'... will soon be concluded...'
Another $58m to Eneo.