7 Apr 2016 07:00
7th April 2016
Victoria Oil & Gas Plc
("VOG" or "the Company")
Victoria Oil & Gas Secures Government Approval for 75% interest
in 1,235 square kilometres Matanda Block in Cameroon
Victoria Oil & Gas Plc, the integrated natural gas producing utility, is pleased to announce that the Government of Cameroon has approved the assignment from Glencore Exploration Cameroon Limited of a 75% participating interest in the Matanda Production Sharing Contract ("PSC") in the Matanda block ("Matanda") to Gaz Du Cameroun Matanda S.A. ("GDC Matanda"). The remaining 25% participating interest is held by Afex Global Limited ("AFEX").
As outlined in the announcement of 18th February 2016 VOG will become Matanda's operator through its 100% owned subsidiary. Details of the work programme will be announced following a forthcoming Operating Committee meeting between GDC Matanda, AFEX and Société Nationale des Hydrocarbures du Cameroun , the Cameroon national oil company.
Matanda covers an area of approximately 1,235 square kilometres and is highly prospective for significant natural gas and gas condensate resources. GDC Matanda will concentrate on the onshore areas of Matanda near the existing Logbaba field with the aim of increasing reserves of gas to be sold into existing and new markets within Cameroon. Work is expected to commence at Matanda during Q4 2016 and will initially involve interpretation of the very large databank of 2D and 3D seismic information with the aim of identifying a drill target.
Kevin Foo, Chairman, said: "We are pleased with the approval of our 75% assignment over the Matanda PSC and are keen to begin our work programme. The large Matanda license area provides the Company with an area over 60 times our existing concession at Logbaba and a critical strategic and geological connection between the two. Upon completion of the current Logbaba two well programme for the second half of this year, we shall turn our attention to development of Matanda".
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
Bell Pottinger
Daniel Thöle / Charles Stewart / Zara de Belder Tel: +44 (0) 20 3 772 2499
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 natural gas to industries in the Douala region from its onshore Logbaba Gas Project. Industrial customers are supplied with gas through a 33km pipeline network built by GDC in Douala.
GDC's gas supply to the thermal, grid power and retail power markets in Douala, is helping to ensure that the Cameroon economy is underpinned with stable energy. By developing a fully integrated gas supply network, connected to wells located within the city itself, GDC has established a new energy supply within Douala that is cost effective, reliable, safe and cleaner than liquid fuel alternatives.
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 1.4Bnboe. Given the challenging economic environment in Russia, The Group has fully impaired the West Medvezhye assets.
Background on Matanda
The link below shows the Matanda Block location
http://www.rns-pdf.londonstockexchange.com/rns/4334U_-2016-4-6.pdf
The Matanda Block is situated in the northern part of the Douala Basin, in the transitional zone between the Wouri estuary and the neighbouring onshore area to the south-west of the city of Douala. The block borders GDC's Logbaba concession at the southern boundary. Approximately 30% of the block is in shallow water, whilst the remainder is onshore.
The North Matanda Field was originally discovered by Gulf Oil Corporation in 1980 and to date three offshore wells on the block have tested gas and condensate from the Logbaba Formation of the North Matanda Field. One onshore well also encountered gas reservoirs in the Logbaba Formation. During 2008 to 2010, Glencore Cameroon and AFEX acquired 200 square kilometres of 3D seismic survey over the North Matanda Field and 150 kilometres of 2D seismic survey over the northern, onshore portion of the block.
In May 2013, Glencore Cameroon spudded well NM-3x, an appraisal well into the North Matanda Field to further define and delineate the Cretaceous reservoirs. The NM-3x well was completed in October 2013 and studies based on its results have concluded that the North Matanda Field extends to the onshore area of the block and continues towards the boundary of Logbaba and that significant potential exists for large-scale gas reserves in this field.
In 2011 and 2014 ERCL, an independent specialist in upstream oil and gas consultancy, reviewed the Operator's estimates of resources for the North Matanda Field based on the new data from the NM-3x well and concluded that the P50 'gas-in-place' volume of 1,864 Bcf with 'condensate-in-place' of 136 MMbbls were valid estimates for the area inside the Matanda 3D seismic survey.
NM-3x drilled deeper than the previous North Matanda wells and discovered new, deep gas reservoirs, which are not included in the above volume resource numbers. Following assessment of extensive drill logs and geophysical data by Afex, both Afex and VOG believe that significant potential exists for large-scale gas reserves in this field.
It is also thought that the North Matanda Field extends to the onshore area of the block.
The Matanda block also contains additional Cretaceous prospects and Tertiary prospects that offset the Moambe and Zingana discoveries drilled in 2015 by Bowleven Plc. in the adjacent Bomono concession. Matanda is located between the onshore blocks of Logbaba and Bomono concession and the offshore block of the Etinde concession. Gas has been discovered at all six wells drilled at Logbaba and in two new exploration wells currently under test by Bowleven Plc. at Bomono. The Etinde concession, operated by New Age (African Global Energy) Limited, has 2C gas and condensate resources of 345 Mmboe.
About AFEX
AFEX is an independent oil and gas E&P company incorporated in Bermuda and focused exclusively on opportunities in West Africa. Since its establishment in 2006 the Company has successfully executed its strategy of acquiring oil and gas exploration and production acreage in the Republic of Cameroon, the Republic of Angola, the Republic of Mali and the Republic of Equatorial Guinea. AFEX's key asset is the Matanda Block in Cameroon, which it entered via a PSC signed in April 2008. AFEX's shareholders include both Gulf Cooperation Council institutions and high net worth individuals. AFEX is advised in corporate and financial matters by Gulf One Investment Bank BSC.
Cameroon Energy Market
Cameroon continues to evolve as a key African economy with the industrial port of Douala a key import and export gateway for goods to most of Central and West Africa. Power deficits remain a major hindrance to Cameroon's economic expansion, with demand increasing 7% annually. Power remains high on the political agenda and gas is seen as a key element of the national energy strategy. Grid power is heavily reliant on seasonal hydroelectric dams to supply 75% of demand and the shortfall is made up from gas and heavy fuel oil. The Logbaba gas and condensate project is a rare example of successful onshore gas monetisation in Sub-Saharan Africa, with energy provision aligned with the national interests. GDC, with the full support of the Government of Cameroon has successfully unlocked natural gas for industrial use. GDC estimates demand for gas in the Douala and Yaoundé area for thermal and power generation and Compressed Natural Gas (CNG) to be in excess of 150mmscf/d. GDC is focused on growing production to help meet this demand and to displace heavy fuel oil by providing a cleaner and more reliable energy source.