VOG.L Regulatory News (VOG)

RNS Number:

Victoria Oil & Gas PLC (AIM:VOG)

23 April 2015

Victoria Oil & Gas Plc

("VOG" or "the Company")

ENEO's Logbaba Power Station Online and Production Increase

Highlights

· Logbaba online and delivering 30MW to grid

· Bassa and Logbaba now delivering a total of 50MW to grid

· Average daily gas production since 50MW online is 14.5mmscf/d

Victoria Oil & Gas Plc announces that its 100% owned subsidiary, Gaz du Cameroun S.A. ("GDC"), has commenced supply of gas to the Logbaba power station following successful installation of all gas fired electricity generators by Altaaqa Global ("Altaaqa"). 30MW of power is now being generated at Logbaba as per the contract with ENEO Cameroun S.A. ("ENEO") announced on 29 December 2014.

The supply from Logbaba, coupled with the previously announced 20MW to Bassa power station, meets the 50 MW target and GDC's responsibilities to deliver gas to both stations has now been met. This triggers take or pay conditions in the contract with ENEO. The total project was delivered in less than four months since the contract was signed.

Average gas production since the 50MW has been online is 14.5mmscf/d with a daily peak of 15.3mmscf/d.

Kevin Foo, Executive Chairman, said: "From contract signing to delivery of 50MW to the grid in less than four months is an outstanding example of how the project partners ENEO, Altaaqa and GDC have made this happen. Average production levels have risen to 14.5mmscf/d, three times higher than levels at the end of 2014, which underlines this transformational agreement for VOG and give us confidence GDC can meet its average production target of 10.4mmscf/d for calendar year 2015." 

For further information, please visit www.victoriaoilandgas.com or contact: 

Victoria Oil & Gas Plc

Kevin Foo / Laurence Read Tel: +44 (0) 20 7921 8820

Numis Securities

John Prior / Ben Stoop Tel: +44 (0) 207 260 1000 

Strand Hanson Limited

Angela Hallett / Stuart Faulkner Tel: +44 (0) 20 7409 3494

Tavistock Communications

Jos Simson / Edward Portman/ Nuala Gallagher Tel: +44 (0) 20 7920 3150

Notes to Editors

About Victoria Oil & Gas Plc

Victoria Oil & Gas (VOG.L) is a gas utility company with operations in the industrial port city of Douala in Cameroon, which is the business hub to Central Africa.

The Company's subsidiary, Gaz du Cameroun S.A. ("GDC"), supplies cost effective, clean and reliable gas to industries in the Douala region from its onshore Logbaba Gas Project. Industrial customers are primarily supplied with gas through a 31.3km pipeline network built by GDC in Douala. GDC products currently include thermal gas, gas condensate and gas for electricity generation. GDC gas is attractive to customers due to its reliability, price competitiveness, low hydrocarbon emissions (compared to Heavy Fuel Oil) and adaptability to meet varied power requirement needs.

The Company generates cash flow from the Logbaba Project which is 60% owned and managed by GDC, with RSM Production Corporation, an affiliate of Grynberg Petroleum Company of Denver, Colorado holding a 40% participating interest.

VOG also holds 100% of the West Medvezhye oil and gas exploration project near Nadym, Russia. The field has C1 plus C2 reserves of 14.4mmboe (under the Russian resource classification system, analogous to proven and probable reserves under Western conventions) in addition to best estimate prospective resources of 1.4bboe.

Cameroon Energy Market

Cameroon is a stable African country that is host to a developing economy serving most of Central Africa with goods and services. A power deficit remains a major hindrance to Cameroon's economic expansion. The power grid is reliant on hydroelectric dams to supply 75% of power and the shortfall is made up from heavy fuel oil and gas. Hydroelectric dams are highly seasonal, with stream rates significantly varying from 6,000m3 per second in the wet season to 50m3 per second in the dry season. As with many hydro electrical systems transmission loss is also a constant issue when balancing power loads across distances to different consuming regions. The port-city of Douala is the major industrial zone within Cameroon and it requires high levels of consistently delivered grid power all year round. Currently Cameroon's energy demand is growing at 7% annually and gas is seen as a key element to Cameroons national energy strategy.