Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
All seems to be progressing smoothly although not at the speed some may wish for.
Some other points.
Insurance claim (outside chance)
Obtain new licence on the part of the logbaba block surrendered in 2011. This was applied for by GDC/RSM in 2018 so a decision should be soon.
Apply for Matanda exploitation licence.
Restart kemerkol production. I'm sure this is part of the plan - they must have spent some time on this before announcing their position earlier - why put the effort in at this stage if that isn't the plan. Last time this came up it was only going to take a few weeks . Replace some plant and turn on the tap. Starts to address strategic weakness of lack of revenue diversity. Don't have to share with anyone either. Original plan was to gradually raise production to 4400 bpd. Around $100m pa at today's prices. Will take a few years but significant I think. After a certain point it will achieve critical mass and development will be self funding . Of course nothing is certain, it may go to the next step and ultimately fail but the omens are good currently.
Addition of Reserves
The licence area has proven C1 category reserves of 8.7 million barrels of oil,
however, C2 reserves have been increased almost 250 per cent to 26.3 million
barrels. Furthermore, the expanded licence area also holds an additional 25.1
million barrels of C3 category reserves.
Reserve Category Original Licence Area Enlarged Licence Area
C1 8.7 Mmbbl 8.7 Mmbbl
C2 7.8 Mmbbl 26.3 Mmbbl
C3 - 25.1 Mmbbl
Total 16.4 Mmbbl 60.1 Mmbbl
Development and Production
The Kemerkol project in the Atyrau Oblast of north-west Kazakhstan has three
productive wells at depths of 1,100 to 1,400 metres, which have tested combined
production of up to 200 barrels of oil per day, although this production is
currently shut in. First production is anticipated for the beginning of next
year and Victoria is aiming to build output to a targeted daily rate of 1,000
barrels of oil per day within Q1 2006.
Through re-entry of these existing wells and with further drilling, the Company
believes that it will achieve the project's initial targeted production level of
4,400 barrels per day within three years of the start of operations. The Company
believes this targeted production level may be increased, following a planned 3D
seismic survey of the expanded licence area.
8 March 2006
First Oil Production from Kemerkol Oil Project, Kazakhstan
• First oil production achieved following re-entry of Well 20 at
Kemerkol oil project in Kazakhstan
• Further re-entry and drilling operations continuing on schedule with
target production level of 4,400 barrels of oil per day planned within
three years
The Board of Victoria Oil & Gas Plc ('Victoria' or 'the Company'), the oil and
gas development company focused in the Former Soviet Union, today announces
first oil production from its wholly owned Kemerkol oil project in the Atyrau
Oblast of Kazakhstan.
First oil production has been achieved at Well 20 following successful re-entry
and re-completion operations. At present, the well is producing 202 barrels of
oil per day from perforations in the Triassic horizon (between depth intervals
of 1,185 metres - 1,194 metres) with no water and only trace gas. At the time of
this announcement, cumulative production was approximately 545 barrels and the
well will be closely monitored over the next few weeks to ensure production rate
stabilisation.
Re-entry and re-completion operations on further shut-in wells are also on
schedule and at an advanced stage. Production from these wells will be
supplemented during the year with the drilling of new wells and production
levels of 1,800 barrels per day by the end of 2006 and 4,400 barrels per day
within three years are targeted.
17 October 2005
35 Million Barrels of Oil Reserves Secured Following Kemerkol Transaction,
Kazakhstan
• Kemerkol Oil Project, Kazakhstan - Total proven C1 category reserves of 8.7
million barrels of oil and probable C2 reserves of 26.3 million barrels
• Transaction completed for under US$2 per barrel of proven C1 reserves
• Licence area increased from 12 to 65 square kilometres - no increase in
Minimum Work Programme
• First oil production expected early 2006
Victoria Oil & Gas Plc ('Victoria' or 'the Company'), the AIM-quoted oil and gas
development company focused on the Former Soviet Union, today announces that it
has secured 35 million barrels of C1 and C2 category oil reserves with the first
completion of the transaction for the Kemerkol subsurface rights contract in
Kazakhstan. Development of the project will now commence and first production
from Kemerkol is targeted for the beginning of 2006.
Total reserves for Kemerkol are now estimated at 60.1 million barrels of oil,
compared to 16.4 million barrels as reported in February for the original
licence area. The 450 per cent enlargement in license area from 12 to 65 square
kilometres has been successfully negotiated after consultation with the Kazakh
Ministry of Energy and Mineral Resources by Victoria without adjustment to the
original Minimum Work Programme.
21 February 2005
Acquisition of the Kemerkol Oil Field in Kazakhstan for US$8.5 million
• Proven C1 category reserves of 8.7 million barrels of oil and C2 category reserves of 7.8 million barrels.
• Total purchase price of US$8.5 million in cash and shares.
• Current shut-in production of up to 200 barrels per day to be increased to 1,000 barrels per day by end 2005 with
first production targeted within 90 days.
• Overall target production of 4,400 barrels per day within three years through further development.
Victoria Oil & Gas Plc ('VOG' or 'the Company') today announces that it has agreed to acquire from Saga Creek Gold
Limited 100 per cent of its exploration and production licence for the Kemerkol oil project (Blocks I and II) in
north-west Kazakhstan.
Kemerkol lies in the Atyrau Oblast of Western Kazakhstan approximately 200 kilometres from the north-eastern coast of
the Caspian Sea and close to a number of existing producing oil and gas fields. The Company has calculated the
project's total recoverable oil reserves under Russian C1 and C2 standards at 16.4 million barrels (2.3 million
tonnes), with C1 reserves of 8.7 million barrels (1.1 million tonnes).
Kemerkol has three productive wells at depths of 1,100 to 1,400 metres, which tested combined production of up to 200
barrels of oil per day, although this production is currently shut in. Through re-entering these existing wells and
through further drilling the Company believes that it can achieve the project's target production of 4,400 barrels per
day within three years. First production is targeted within 90 days and the Company believes that 1,000 barrels per day
can be achieved within 2005. The Minimum Work Programme requires further 2D seismic data and drilling of 14 new wells
over a six year period.
MaisyD's comments @ 8.08 this morning. We're both speculating. Nothing concrete. It's been referenced from time to time in reports. See Roger's comments on Page 4 of the 2018 accounts. Obviously a change at the top since then and revised priorities but always possible something unexpected has come on the radar.
In reality probably just housekeeping. The two directors were appointed the same day that the annual confirmation statement was filed. A convenient time to make the appointments.
There's only 1 share. VOG own it now. Therefore 100%. Kate was the original subscriber.
It's not likely to have anything to do with upstream downstream activity. That would have had to be incorporated in Cameroon and can all be handled in the GDC companies. It's just an accounting split in reality.
I would suggest this is possibly a holding company for African assets, or some kind of marketing/admin setup to promote VOG there. Also possibly a start in ringfencing different regions. Maybe they've been looking at other African assets as MD pointed out and they are close to a new venture.
Intriguing. I have a hunch we will be pleasantly surprised. Roy has a lot of balls in the air and I'm sure we haven't been told of some yet.
I don't read it that way. This comment is, I believe, in the historical context of resuming back in 2019. ENEO didn't like the fact they had signed up for take or pay or didn't understand the significance, and have commented on paying for something they haven't received the past. Hence the wrangling over the outstanding invoices. I don't think there is any intention to supply gas for power from Logbaba any more. twice bitten etc and it's essentially reserved for higher margin commercial customers as they can make 2 to 3 times as much from the same volume. According to their latest reserves they don't really have spare for power and they won't be drilling again in a hurry. Better to re-focus on CNG as the margins are even larger.
Gas for power will either come from Matanda or Etinde in due course.
In any case are there any generators still in the country? Hasn't Altaaqa removed them and what are the chances of them returning?
Need to bear in mind that the legal and professional fees for all the ongoing activities must be substantial. They are also preparing for Matanda drilling with long lead items being ordered and needing to be paid for soon, and I guess a deposit on a rig. Not a huge amount borrowed in the scale of things.
You might ask yourself where the unsolicited interest came from and why Gazprom are planning to explore a block which is close to or possibly adjacent to west med and the processing facilities of the Medvezhye field, if it is so expensive. WM would most likely be a good fit. Prospective reserves of c 1.4bn boe. And these are v. conservative as published figures.
100's if not 1000's of successful wells have been drilled on that peninsular in 3 supergiant gas fields so the geology is well known. The big players should be able to maximise the opportunity, and at lower cost, in a way that might not be possible to VOG.
This article was just before VOG announced the interest.
https://www.upstreamonline.com/exploration/gazprom-targets-exploration-in-region-with-huge-gas-projects/2-1-766554
I've only seen these headlines but it's clear enough where the location is.
The problem VOG had was mainly, I believe, a market access and distribution cost one using Gazprom's processing and distribution network and the low end price they would get from the power station they had lined up.
I don't believe they would have engaged the agency they have if there wasn't a serious prospect of selling and I doubt it will go for peanuts either.
I was doing a bit of research on the West Med location when I came across this.
https://www.upstreamonline.com/exploration/gazprom-targets-exploration-in-region-with-huge-gas-projects/2-1-766554
I can't find anything directly about the Pandinsky block mentioned but since there are major gas fields to the north and east and there is a national park and smaller gas field to the south of medvezhe, it looks probable that it is close by or adjoining West Med in the area between Nadym and Medvezhe. Roy mentioned unsolicited interest and it seems likely this is why. Makes sense to combine the whole lot into a bigger project. With Medvezhe in decline and all the infrastructure in place and nearby it would be a low(er) cost development to replace lost production.
Check out google earth - you can see all the gas field infrastructure for the main fields, medvezhe, yamburg and urengoy and zoom in on the processing plants. Medvezhe runs north from Pangody to the coast. Yamburg is north of that and Urengoy (at one time the largest gas field in the world) is to the east and north east.
I can't see a sale not going through in the light of this. But I can see why there wasn't much interest before. Too many big gas projects in the wider region.
I take your point but I had a quick look and the requirement was to submit id's with questions so it would be reasonable that only those people would get responses before the meeting. Essentially to put them in the same position as they would have been if they had been able to attend. It only said a response would be made before the meeting not that they would be published to all.
It's a moot point now, but if they didn't send them to those registered that then clearly it's a poor show. I expect to see the Q&A on the website as soon as possible as no doubt you do too.
Looks like they were only going to be sent to those who registered. Makes sense not to publish them generally before the meeting.
are on the website.
They lost 7m after charging 10.4m non cash items. Depreciation,amortisation and other asset write offs. At the operational level they are cash generative. Assuming payment of course. Admin costs should be significantly lower in H2. H1 had office move placement costs payoffs. I reckon about 10m in a full year. 4m reported in H1. 6m in H2 with lower costs and higher sales. All imo.
A placement. A large chunk of it will be placement fees. Also they moved offices during the period. second half year should be much lower.
To clarify an earlier post . Depreciation and amortisation are both write offs of past capitalised expenditure and have no current period cash implications. Better to look at the ebitda figure which does not include them.
From the same RNS.
I would say industry partner/asset level deal = farm out. Could have been clearer.
The Company's preferred route of financing is to conclude a transaction with an industry partner on terms that are favourable to shareholders, and that may obviate or minimise the need for further equity financing. However, depending on the terms of the asset-level deal achieved, it may also be necessary or in shareholders' interests to raise a portion of the additional finance via the issue of further corporate equity.
https://www.proactiveinvestors.co.uk/register/event_details/217
The details are in the rns of 6th march. And details of the lockin.
Just to divert your attention from today's update for a minute.
I happened to go past HH yesterday and no sign of VOG. It looks like the lease may have been up and the building has had some refurb work done on it recently. A quick google later showed all floors were available to rent.
Apologies if this has been posted before.
It seems VOG has been expanding without our knowledge (or I've missed a few years).
http://www.victoriaoilgas.com/services-2/
I assume it's a spoof website - no 'and' in web address.
Anyone know any more about this?