9 Jul 2012 07:00
9 July 2012
Victoria Oil & Gas Plc
('VOG' or 'the Company')
(AIM: VOG)
Commencement of Continuous Gas and Condensate Production
Operations at Logbaba
Highlights:
·; RDL commences continuous production operations at Logbaba
·; Current production of 0.7 million standard cubic feet per day ('mmscf/d')
·; Production forecasts remains on schedule to increase to 8 mmscf/d by the end of 2012
·; RDL becomes the first gas producer in Cameroon to supply the industrial market
Victoria Oil & Gas Plc, the AIM quoted oil and gas exploration and production company with assets in Cameroon and the FSU, is pleased to announce the commencement of continuous production operations at its 95% owned and operated Logbaba gas and condensate project onshore Cameroon managed by its wholly owned subsidiary Rodeo Development Limited, ('RDL').
The Company's first three customers are now taking delivery of gas in sufficient volume to allow the production facilities to operate 24 hours a day, delivering gas in full compliance with specification. These customers have a combined average daily demand of approximately 0.7 mmscf/d. The Company is assisting additional customers to convert their factories to take gas.
The Company remains on schedule to increase production to 8 mmscf/d by the end of the year. This will be driven by an increase in the number of thermal (heat requirement) customers and the installation of gas powered electrical generation units on customers' sites. The first units are expected to come on line in mid Q4 2012. This will be a major development for Cameroon, making clean and reliable power available to industrial users.
Further updates on existing customer volumes will be provided in due course.
For further information, please contact:
Victoria Oil & Gas Plc - Tel: +44 (0) 20 7921 8820
Kevin Foo / Martin Devine
Macquarie Capital (Europe) Limited - Tel: +44 (0) 20 3037 2000
Jeffrey Auld / Steve Baldwin / Nicholas Harland
Fox-Davies Capital - Tel: +44 (0) 20 3463 5010
Daniel Fox-Davies/ Richard Hail
Strand Hanson Limited - Tel: +44 (0) 20 7409 3494
Simon Raggett / Angela Peace
Tavistock Communications - Tel: +44 (0) 20 7920 3150
Ed Portman/ Simon Hudson
Background Information on Victoria Oil & Gas Plc:
Victoria Oil & Gas Plc is an independent oil and gas exploration and production company with projects in Africa and the FSU. The Company's principal assets are the Logbaba gas and condensate project in Cameroon and the West Medvezhye project in Siberia, Russia. Logbaba is located in Douala, the economic capital of Cameroon. The field was discovered in the 1950s when all four exploration wells drilled at the time encountered gas. The Company drilled two successful development wells in 2009/10 and was awarded an Exploitation Licence in April 2011.
The Company's Logbaba proved and probable reserves are sufficient to supply an average of 30 mmscf/d for the next 20 years to industrial customers. Under current management projections, the Company forecasts industrial gas demand to rise to 44 mmscf/d by the end of 2014. In the longer term, as further reserves may be proven, gas may also be supplied to large gas fired power stations connected to the grid, with either VOG investing in an independent power producer joint venture or selling the gas to third parties. The Company has signed a multitude of gas sales agreements with industrial customers to serve their energy requirements and anticipates in excess of 40 customers over the medium term.
West Medvezhye is situated in the prolific Yamal-Nenetsk hydrocarbon region in Siberia. An independent audit, carried out by Mineral LLC in 2011, estimated prospective resources for the area of over 1.4 billion barrels of oil equivalent ('boe'). The Company also has a discovery well, 103, with C1 and C2 reserves, independently assessed under the Russian classification convention of 14.4 million boe as approved by the Russian Ministry of Natural Resources.
Development studies are in progress to commercialise the Well-103 discovery and prospective resources and a detailed well design study for the upcoming drilling campaign has commenced.