18 Aug 2010 07:00
18th August 2010
Victoria Oil & Gas Plc
("VOG" or the "Company")
Operations Update
Logbaba Gas and Condensate Project, Cameroon
Highlights
·; Second well, La-106 flowed gas at rates up to 22MMscf/d (ca. 3,600 boepd)
·; Facilities and pipeline projects and first gas delivery on schedule for December 2010
·; 20 year exclusive Gas Sales Agreements with the gas price fixed at $16 per million btu for the first 5 years
·; Appointment of Don Nelsen as Country Manager, Cameroon
Victoria Oil & Gas Plc, (AIM: VOG), the oil and gas exploration and development company with assets in Cameroon and the FSU, is pleased to announce an update on its operations at Logbaba, Cameroon.
Logbaba represents the first commercial onshore gas discovery in Cameroon. The field is located in the Eastern part of Douala, the industrial capital of Cameroon and the seaboard hub of Central Africa and its member countries.
The Company has successfully drilled and completed two production wells and is on schedule to deliver gas to first customers during December 2010. VOG aims to benefit from its significant first mover advantage and capitalise on Cameroon's strategic location and growing energy demands.
The Company offers a considerably cheaper source of fuel and reliability of supply to industrial users, power suppliers and liquid fuel users. Approximately 80% of the initial customer base lies within a 10km radius of the deposit and the Company forecasts that the market will grow to over 100MMscf/d per annum within the next five years.
Logbaba La-106 Well Testing
The second well drilled by the Company, La-106, has continued to flow from the initial perforated interval in the Lower Logbaba formation during most of July. As previously reported, the delivery of special equipment to assist with the high temperatures and pressures experienced in the well bore was duly procured and the perforation of the remaining intervals was successfully completed.
Following completion of the last perforations the well was re-opened to flow on Saturday 14 August and flowed at rates up to 22MMscf/day, (ca. 3,600 boepd,) at different choke sizes up to 36/64 inch and well head flowing pressures up to 3,078 psi. The Company's drilling and operations team are continuing to prepare this well for production.
The first well drilled by the Company, La-105, which flowed at rates of 55MMscf/d (ca. 9,100 boepd,) and 1,000 bbl/d of condensate is more than capable of servicing the anticipated market demand in the medium term.
Production Facilities and Pipeline
Following the award of the gas processing plant contract to Expro in July, contracts have now been awarded for the polyethylene pipeline and fittings, directional drilling and jointing equipment. The first pipe supplies have been shipped this week. All other activities including licences and permits are progressing on schedule.
The expected date for the first gas deliveries to customers remains December 2010. Our sales and gas marketing team in Douala have signed 20 year exclusive Gas Sales Agreements with the gas price fixed at $16 per million btu for the first 5 years. Additional customers continue to be signed up.
Country Manager Appointment
The Board welcomes Mr. Don Nelsen to the company as Country Manager, Cameroon. Mr Nelsen is a 30-year veteran of the international oil and gas industry. A graduate of the US Military Academy, Boston University, and The University of Nebraska, he is an engineer, international business specialist and lawyer. Before joining VOG, he has worked as Country Manager for ConocoPhillips and Noble Energy in Cameroon and Venezuela, in successful exploration and development operations.
Chairman Kevin Foo commented, "We are very pleased with progress at Logbaba and we remain focussed on delivery of first gas to customers by the end of year. We welcome Don Nelsen to the Company. He has international project management experience and will be a valuable addition to our team."
For further information, please contact:
Victoria Oil & Gas Plc
Tel: +44 (0) 20 7921 8820
Jonathan Scott-Barrett / Kevin Foo
Strand Hanson Limited
Tel: +44 (0) 20 7409 3494
Simon Raggett / Angela Peace
Fox-Davies Capital
Tel: +44 (0) 20 7936 5236
Phil Davies / David Porter
Conduit PR
Tel: +44 (0) 20 7429 6611
Jonathan Charles / Ed Portman